I’ve discovered that the majority of people who come into my office, about 60%, have made an error that ruins their estate plan.
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SAN JOSE, Calif. (PRWEB) December 07, 2017
A revocable living trust is the most common form of estate planning in California, and creates an entity that allows for the bypassing of the probate system. “Instead of going through probate it goes to the trustee you’ve appointed,” said estate planning attorney Adam Diran, co-founder of Diran & Grey. “However, the trustee only has direct access to assets that are titled into the trust. No asset is in a trust unless it has a title document that says that it is in the trust.”
To further educate people about revocable living trusts and estate planning, Diran shares the following two tips, which are not to be taken as legal advice and are only meant for public service.
No. 1: Transfer all financial assets into the trust. “I’ve discovered that the majority of people who come into my office, about 60%, have made an error that ruins their estate
plan,” noted Diran. “Most people never fund their trusts. For example, for a house typically held as ‘Mr. and Mrs. Smith, husband and wife,’ what their deed needs to say is ‘Mr. and Mrs. Smith as trustees for Mr. and Mrs. Smith trust...’”
People need to transfer not just their homes, but all their financial assets into the trust. For example, brokerage accounts. “They realize their house has a deed, they don’t think their bank account has a title doc, and it does,” added Diran. “If you have a trust, all of your assets need to be titled in the trust, otherwise it does nothing for you.”
No. 2: Fund the revocable living trust in the future. “Funding doesn’t just mean the accounts you have now; it also means the accounts you open next week, next year, or ten years from now,” stressed Diran. “The issue is not just trusts that aren’t initially funded but trusts that aren’t maintained. We all go through life opening and closing financial accounts, buying cars, and hopefully buying real estate. This is a very simple issue to deal with. A brief call to your financial institutions to make sure your assets are properly titled could potentially save your children many thousands of dollars in legal fees.”
Think about creating a trust as creating a big box. “If you don’t put your assets in the box, the big empty box doesn’t do you any good,” concluded Diran. “Sadly, I frequently see people that come in with beautifully written trusts that were never properly funded.”
About Adam Diran, Diran & Grey
Adam Diran is a J.D. and an M.B.A. Adam uses his financial expertise to advise clients in estate planning. For more information, please call (408) 279-1118, or visit http://www.dirangrey.com. The law office is located at 551 Stockton Ave., San Jose, CA 95126.
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