How to Ensure That Your Trust Is Funded Properly

Creating a trust can be a great way of ensuring that your kids or pets are taken care of after you pass on. It can also be a great way to provide money to charitable organizations or otherwise manage your estate while you are alive. However, it is important that you actually fund the trust to ensure that it takes effect when you want or need it to.

Creating a Pour-Over Will Is an Easy Way to Fund a Trust

One way to fund a trust is to create a pour-over will at some point during your life. A pour-over will is essentially a will that instructs the executor to put everything into a trust that was created at some point in the past. The use of such a will can be ideal for those who aren’t sure what to do with certain items or acquire property after the trust was created.

Assets Should Be Titled in Its Name

If a house is supposed to be in a trust, the title needs to be in the trust’s name. The same is true of a vehicle or anything else that comes with a title or a similar type of designation. Generally speaking, you can designate a trust as the beneficiary of a life insurance policy. This means that when you die, the death benefit will typically just go into the trust where it will be distributed per your instructions.

Review Your Trust With an Attorney

It is generally in your best interest to work with a trust administration lawyer in Las Vegas to ensure that the trust is created properly. An attorney may also be able to help surviving relatives figure out what they need to do if a trust was not created properly. In some cases, this may mean going through probate as assets will likely be left in the estate.

The Consequences of Failing to Update Your Will

If you were to succumb to old age, injury or illness tomorrow, the most current version of your will would be given to a probate judge. Assuming that the will is valid, it is what the judge would use to determine how assets should be distributed. It would also be used to determine who should look after a child assuming that a guardian was named in the document.

Failing to Update Your Will Could Leave a Child With Nothing

Let’s say that you wrote your will after the birth of your first child and declared that everything that you own goes to that person. Let’s also say that you have another child in the future who is not named in the will. By failing to update your will, he or she could be entitled to nothing or to only a fraction of what you would have wanted a son or daughter to have.

A Lengthy Legal Battle Could Result

Your spouse, children or other interested parties could all try to claim that they are entitled to a share of your estate. Without clear instructions, a judge may have no choice but to make rulings regarding those claims, and those rulings may or may align with your actual wishes. Furthermore, relationships between family members could become strained as the legal battle progresses.

Make Time to Review Your Estate Plan

It is generally a good idea to review an estate plan after a child is born, after a divorce or after any other significant life event. A probate attorney in Las Vegas may be able to help you go over your plan and make any necessary adjustments. An attorney can also be helpful in keeping the probate process on track after you pass.

Deciding How to Allocate Assets Among Your Children

If you own anything at all, you may have had thoughts about who should inherit those assets when you die. It is important to recognize that you can divide your estate however you wish even if your children may object. Let’s look at some ways to structure an estate plan that accurately reflects your final wishes and how to communicate those wishes ahead of time.

Divide Your Estate Through the Use of a Trust

Assets in a trust can be distributed in any manner that you would like. Therefore, you can choose to divide your estate equally among your children or choose to leave everything to just one child. In the trust document itself, you can write a paragraph or two explaining why one child got a majority stake in the family business while another got an antique painting or money in a bank account.

Beneficiary Designations Can Be Helpful

A beneficiary designation allows an asset to be passed on to a beneficiary as soon as the current owner passes on. It is important to note that this designation is considered more important that any language contained in a will. Therefore, it is important to update them as life events unfold. In most cases, only the beneficiary knows about the transfer, so it is unlikely that anyone will challenge it.

Have a Conversation With Your Kids Ahead of Time

While you are under no obligation to tell your children why you allocated your assets like you did, it is a good idea to do so. This may help to prevent fights between children or prevent your children from resenting you after you pass. An estate planning attorney in Las Vegas may be able to participate in this conversation or have private conversations with adult children on your behalf.

Choosing Guardians in an Estate Plan

Estate planning involved decisions that are about more than just what will you do with your money and property. If you have minor children, your estate plan will also need to include provisions about what will be done with your children if you are not here and how they will be raised.

Have the Conversation First

Before listing someone as the guardian for your children in your estate plan, make sure that you speak with them first to make sure that they are willing to serve in that role. The worst possible thing is for a guardian to be needed, but the person named does not want to fulfill the responsibilities. Not only should you verify that they want to be the guardian, but you should also discuss specific plans for raising the children. Things should never be a surprise to those who will likely already be making contingency plans quickly.

Put It in Writing

The estate plan should spell out any conditions or wishes that you have for how you want your children to be raised. For example, you may want them raised according to a certain religious faith. However, if it is not in your estate plan, the conditions will not endure if you are no longer here. Your estate plan is the way that you make your desires known when you are not here to put them into practice.

Choose the Best Guardian

Many people will consider the age of the prospective guardian and may hesitate to choose them if they are older. This includes the child’s grandparents. However, families should plan for today as opposed to the possibility of what may happen if the prospective guardian can provide for the most continuity for the children. In other words, families should not overthink the decision of who to name at the guardian. An estate planning lawyer in Las Vegas can advise you how to do this effectively.

Avoid the Trap of a Fraudulent Conveyance

Courts may sometimes disallow the transfer of assets into a trust if it is done to avoid a certain debt of piece of litigation. It is vital to move the assets into a trust when there is no specific threat faced so that the transfer can survive litigation if it is challenged.

Make Sure the Timing Is Right

Once you have already been sued, or a creditor has begun to seek payment of a certain debt, it will be too late to affect a transfer of the asset. There must be a judgment or a debt that you are trying to avoid in order for a court to rule that something is a fraudulent conveyance. Even if an asset is being moved into a trust as opposed to being given to someone else, there can be such a thing as too late. It is better to act well in advance of when you think that you may need the protection of the trust.

There Does not Need to Be Actual Fraud

Courts can find that transferring assets into the trust constitutes constructive fraud. When moving assets into a trust, it is best to be as upfront as possible so a later court can understand your reasoning for moving assets to a trust. Document and explain the explanation for your actions so you can keep your intentions above board. The alternative is that a court can reach your assets and take them from the trust.

Work With an Attorney

A trust administration lawyer in Las Vegas can help you structure and time the transfer of assets into a trust in order to ensure that it remains valid and your assets stay yours. If the transfer is not done correctly, it is as if the transfer never happened at all. An attorney can work with you to select different trust structures and find the right jurisdiction in which to establish your trust. Establishing a trust is not something that should be done yourself.