Mportant Information About Your Revocable Living Trust (Page 2 of 10) in pdf

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death. In addition, you may have signed a “durable power of attorney” in which you authorized someone else to

transfer assets you own into the name of the trust.

Because of the pour-over Will and durable power of attorney, it is not absolutely essential for you to transfer

title to your assets into the name of the trust right away. Instead, the trust could be a “stand-by” receptacle to

receive your assets in the future. If you became disabled, the agent you named in your durable power of attorney

could use the power of attorney to transfer assets into the trust, and your successor trustee would then manage

the assets for your benefit. In addition, any assets you own at your death will be added to the trust under your

pour-over Will.

There are, however, reasons why you probably want to transfer at least some of your assets to the trust right

away. One of the reasons many people use a revocable living trust is to avoid probate. Property held in your

revocable living trust at your death does not have to pass through probate. It is either retained in the trust, or

distributed by the trustee, as provided in the trust agreement. However, your trust will successfully avoid

probate only for assets that you transfer to the trust during your lifetime. Assets that you retain in your own

name at the time of your death are subject to probate procedures, even though the assets may pass to the trust

under your pour-over Will.

You should also understand that your trust can function effectively as a disability planning tool only if property

can effectively be managed by your successor trustee in the event of your disability. As we said earlier, your

durable power of attorney can allow your agent to transfer assets into the trust if you become disabled.

Sometimes, however, institutions such as banks and brokerage houses are reluctant to accept durable powers of

attorney that are not on the institution’s own form. Transferring assets to your trust yourself avoids this

potential practical problem with the acceptance of a durable power of attorney.

As an alternative, you could sign an additional power of attorney for each bank, brokerage house, or other

institution, using the institution’s own power of attorney form. You would then have your “master” power of

attorney that we prepared for you, as well as a separate power of attorney for each bank, brokerage firm, etc.

However, this approach could create problems if there are differences between the master power of attorney and

one of the institution’s forms. Also, if you ever wanted to make a change (to name a different agent, for

example), you would have to make the change with each institution, as well as changing the master power of

attorney. Therefore, we generally do not recommend this alternative unless there are other reasons not to go

ahead and transfer assets to your trust.

We want to remind you that your trust is revocable by you. Thus, although “record” or public title to your assets

may be transferred to the name of the trust, you will still control those assets.

If you wish, we can assist you in changing the titles of your assets to the name of the trust. If you change the

titles yourself, and as you acquire new assets, it will be your responsibility to see that they are properly titled.

Different types of assets may need to be handled in different ways. Part I of this memorandum contains

suggestions that should help you re-title your assets. These suggestions do not cover every type of property,

however. You should, of course, feel free to call us to discuss any questions that arise.

Mportant Information About Your Revocable Living Trust Page 2