“The fortune is in the follow-up.”
“The devil is in the details.”
Ludwig Mies van der Rohe
I recently met with a couple who had gone several years ago to a nearby “traditional” law firm for their estate planning. The firm created separate revocable trusts for the husband and the wife, and then, once all of the documents were signed, sent the couple an email with a spreadsheet of all of their assets attached, and told them [paraphrasing], “here is your homework – make sure you get all of these assets into your trusts. Good luck!” No instructions on what to do, no guidance or real help at all. You can probably guess what happened next. Of course, the client didn’t know what to do or where to start, and so they did nothing. When they arrived at my office, there was not a single asset that was titled in the name of their trust. It was my duty to tell them that if they died, their family would be stuck with a messy Probate Court process. They were surprised and disappointed at the news, as Probate was what they were hoping to help their family to avoid in the first place.
Probate can be very difficult and unpleasant in Massachusetts – it is almost always a long and cumbersome process, expensive, and very public. Although a revocable trust allows you to bypass the Probate Court process completely, that only can happen if the trust is a FULLY FUNDED trust. That means that your assets need to be owned in the name of the trust (real estate, bank accounts, investment accounts) or named as a beneficiary (life insurance, retirement accounts). Failure to complete the funding of the trust – the transfer of assets to the trust – means that those assets will still have to go through the Probate process upon your death.
Sadly, I see too many instances where people create a perfectly good trust, but then fail to fully fund that same trust. And the sad thing is, it’s usually not the clients’ fault – their attorney has let them down. Most “traditional” estate planning firms simply leave the (often complex) task of completing trust funding in the clients hands, without providing any guidance or support.
In our office, we do things very differently. Each of our trust-based planning clients can choose to have our dedicated trust funding coordinator take care of all of the paperwork for them, or they can choose to do it themselves. If they choose to do it themselves, we provide a comprehensive Funding Toolkit, so that they have a funding roadmap that they can follow. And, we always take care of transferring a client’s primary residence to the trust, no matter what.