Pennyborn s Living Trust Checklist Page 1 of 7 INSTRUCTIONS FOR USING PENNYBORN S LIVING TRUST CHECKLIST 1. This Checklist only applies to Living Trusts. If you want to make any other type of Trust, do not use this Checklist - it is only applicable to a specific type of trust known as a Living Trust. Certain action items on the Living Trust Checklist may not apply to your situation. If an action item does not apply, strike through it and go to the next task. Depending on the complexity or size of your Living Trust and applicable state laws, you may be required to complete additional actions not shown on this Checklist to establish and fully fund your Living Trust. This Checklist includes several blank spaces for you to write in any additional action items you need to complete based on guidance from your attorney, accountant or financial advisor. Review all actions on the Checklist before you begin. 2. If you wish to include a marital bypass trust provision in your Living Trust for estate tax purposes or wish to include a Child s Trust, a Pet Trust or any other subtrust in your Living Trust, ask your estate planning attorney to include these provisions. Living Trust Agreements are complex instruments and should only be prepared by experienced, licensed professionals. 3. If you have an heir that is likely to become disgruntled about not receiving an inheritance from your estate, or if any individual is likely to dispute or contest your Living Trust or Will, ask your estate planning attorney to draft your Living Trust and Will in a way that may deter such legal action and thereby reduce potential legal fees and expenses your estate could be forced to pay in the event of a will or trust dispute. 4. This Checklist is intended to provide a basic list of the steps that are generally required to establish a Living Trust. Only an estate planning attorney that has reviewed your unique circumstances can properly advise you regarding your Living Trust and estate plan. This Checklist may not be a comprehensive list of all the steps required to make a Living Trust for your situation under the laws of your state. If your Living Trust is not properly executed, your Living Trust may fail or be deemed unenforceable, which could result in your assets being subject to probate. If you do not complete all the steps necessary to fully fund your Living Trust, it could result in all or a portion of your estate being subject to probate. 5. The Living Trust Checklist is an estate planning tool designed to help you maintain an organized record of the steps that typically must be taken to establish a Living Trust. This Checklist does not constitute legal, tax or financial advice, and is not a substitute for consulting an attorney, tax professional, and financial advisor regarding your individual circumstances, goals, and objectives.
Pennyborn s Living Trust Checklist Page 2 of 7 Read instructions for using the Living Trust Checklist. Make a list of the reasons you want to make a Living Trust. If you are married, discuss your estate planning objectives and concerns with your spouse. In most cases, a married couple finds it advantageous to use a shared or joint Living Trust that provides for distribution of each spouse s estate in the same document. Download, print and complete Pennyborn s Estate Planning Worksheet from www.pennyborn.com. Completing the Estate Planning Worksheet is a way to compile and organize the information you need to complete your Living Trust, such as a list of your desired beneficiaries, assets that need to be transferred to the Living Trust, accounts on which beneficiary designations may need to be changed, and identify important issues you want your Living Trust to cover. Completion of the Estate Planning Worksheet or a questionnaire provided by your attorney is an essential step in gathering the information necessary to complete your Living Trust. Gather a copy of your most recent account statements from all bank, brokerage, mutual fund, and retirement accounts, along with insurance policies, real estate deeds, and a written description of other assets. You will need these documents to verify how title to each asset is held and to ensure you have a comprehensive list of all securities, business interests, insurance policies, vehicles, real estate, jewelry, collectibles, and other assets you want to pass to your beneficiaries through a Living Trust. Decide how you want your estate distributed at your death. Make a list of the names and addresses of the individuals you want to inherit your estate and the percentages or amounts that should go to each beneficiary. If you want certain individuals to inherit specific items of personal property or another type of asset, include each person s name and address on the list next to the item of property you want him or her to receive. These individuals will be named as the final beneficiaries of your Living Trust. Next, make a list of alternate beneficiaries you want to inherit your estate in the event any of your desired beneficiaries predecease you. If you prefer, you can specify in your Living Trust that the heirs of a final beneficiary shall inherit the final beneficiary s share if a final beneficiary predeceases you.
Pennyborn s Living Trust Checklist Page 3 of 7 Choose a relative or friend (or an attorney or trust company) to serve as Successor Trustee to administer your Living Trust after your death. Then choose a second person or trust company to serve as Alternate Successor Trustee in the event your first choice for Successor Trustee is unable or unwilling to serve. If possible, choose a third person or trust company to serve as Second Alternate Successor Trustee if your first two choices are unable or unwilling to serve. Your choices for Successor Trustee should be named in your Living Trust Agreement along with a current address for each one. If you want more than one person to serve as Successor Trustee at the same time, you can name Co-Trustees. Choose an Executor, Alternate Executor, and Second Alternate Executor to administer any portion of your estate that may pass by your Will, which should be prepared in the form of a Pour- Over Will when you establish a Living Trust. (Your Successor Trustee and Executor can be the same person.) Talk with each person about your choice and confirm they are willing to assume this responsibility. If you designate an attorney or trust company to serve as Trustee or Executor, it is prudent to review the fees and expenses they are likely to charge your estate for these services. Make a list of all questions you have about your Living Trust and discuss them with your estate planning attorney when you meet to discuss preparation of your Living Trust. Schedule an appointment and meet with an accountant or tax professional to learn whether your estate or your spouse s estate is likely to be subject to federal and state estate taxes. If your tax advisor indicates that a portion of your estate could be forfeited to the government to pay estate taxes, you may want to incorporate estate tax-saving strategies in your Living Trust. There are many different methods of estate tax planning. If estate taxes are a concern, do not execute a Living Trust without first consulting an estate planning attorney about what type of Trust or other estate planning method should be used to address your estate tax concerns. Make a note on your Estate Planning Worksheet if you wish to incorporate a Child s Trust, Pet Trust or another type of subtrust in your Living Trust.
Pennyborn s Living Trust Checklist Page 4 of 7 If you own stock in a privately held company, decide how you want your stock distributed upon your death, including whom you want to inherit your stock, subject to the terms of any applicable Shareholders Agreement, Buy-Sell Agreement or other restrictions on the transfer of the stock. If you want to transfer your stock to your Living Trust, contact the corporate secretary for preliminary information on how to transfer your shares. If you own a small business or partnership, decide how you want your business or partnership share distributed as part of your estate plan. This should be addressed by the terms of your Living Trust. If you want the business to continue after your death, you should develop a Business Succession Plan. If you do not have an attorney, contact at least three attorneys to discuss your estate planning goals. Ask about their qualifications, experience, and fees. After you have gathered enough information, choose an estate planning attorney to draft your Living Trust and Pour-Over Will. Schedule an appointment with the attorney to begin the process of preparing your estate planning documents. When you meet with the attorney, bring your Estate Planning Worksheet, the account statements, insurance policies, deeds, and other records of your assets, your list of desired beneficiaries, choice of Successor Trustee and Executor, and other notes and questions you compiled during the planning process outlined on this Checklist. Discuss with your attorney any information you received from your tax professional about estate taxes or other important financial issues that may affect your estate plan, including any small business interests or privately held stock. Ask your attorney how you should hold title to any life insurance policies and whether you should make changes to the beneficiary designations on your life insurance after your Living Trust is established. If you are married or have a domestic partner, your spouse or partner should also attend the appointment.
Pennyborn s Living Trust Checklist Page 5 of 7 When your attorney prepares a draft of your Living Trust, Pour-Over Will, and related documents, they should be sent to you for review. The documents that make up your Living Trust package may include a Living Trust Agreement, Certificate or Abstract of Trust, Schedules to the Trust, Pour-Over Will, and Trust Transfer Deeds for real estate. Read the draft documents thoroughly. Make notes regarding necessary corrections. The Living Trust should have Schedules that describe the items of property you are transferring to the Trust, such as home furnishings, jewelry, family heirlooms, collectibles, and the contents of your personal residence. Review the property descriptions to ensure all items you want covered by your Living Trust are included. Contact your attorney about finalizing the documents for execution. Make the attorney aware of any necessary corrections and ask any questions about the draft documents. Before transferring title to your real estate to a Living Trust, consult your attorney about whether your real property taxes or any homestead exemption will be affected by transfer to a Living Trust under the laws of your state. If your attorney advises you to transfer your real property to your Living Trust, the attorney will usually prepare a Trust Transfer Deed or similar type of deed that will be recorded in the county where the real estate is located. Your attorney will usually offer to record the deeds for a fee. Discuss this with your attorney to ensure any change of title is properly recorded. It may take approximately 4 to 8 weeks from the date of recording to receive a stamped, recorded deed documenting the transfer to your Living Trust. Your attorney should schedule an appointment for execution of your Living Trust Agreement, Pour-Over Will, Certificate or Abstract of Trust, Trust Transfer Deed if applicable, and any related documents, in the presence of a notary and witnesses. Alternatively, you may execute the documents in the presence of a notary and the required number of witnesses at a notary s office or bank. Your Living Trust, Pour-Over Will, and other estate planning documents will not be valid unless they are properly notarized and/or witnessed in accordance with applicable state law.
Pennyborn s Living Trust Checklist Page 6 of 7 After your Living Trust is executed, the next step is to fund it. Fund your Living Trust by transferring title to real estate, vehicles, brokerage accounts, mutual fund accounts, bank accounts, safe deposit boxes, bonds, and stock certificates to the name of your Living Trust. (The name of your Living Trust and how title should be held should be on your Certificate or Abstract of Trust.) Most banks, brokerage firms, and other financial institutions have account applications or other paperwork that must be completed to change the name on your accounts. Transferring title to stock certificates typically involves signing the certificate in the presence of a representative at the financial institution authorized to issue a medallion signature guarantee stamp. A properly executed stock power form may also be used in most cases. Contact your financial advisor for assistance registering your accounts in the name of your Living Trust and transferring title to stock certificates. Do not sign or write on stock certificates without the assistance of a financial professional that has experience with stock certificate transfers. (Transferring title to real estate is discussed above.) After your Living Trust is executed and you have transferred title to your assets to the Living Trust according to instructions from your attorney, review the primary beneficiary and contingent beneficiary designations on your retirement accounts such as pension, profitsharing, IRA, 401(k), 403(b) or other retirement plans. While it is usually more beneficial to name an individual as beneficiary of these types of accounts rather than naming your Living Trust, there are some instances when it may be beneficial to designate your Living Trust, such as when you have executed certain types of estate tax-saving trusts, such as an AB Living Trust, or when you have minor children and have established certain trust provisions for them as part of your estate plan. Review and update the primary and contingent beneficiary designations on all retirement accounts in accordance with any instructions received from your attorney. Consult your financial advisor for more information about how these designations may affect your beneficiaries based upon factors such as your age, the age of your beneficiaries, and the type of retirement account.
Pennyborn s Living Trust Checklist Page 7 of 7 Store your Living Trust and other estate planning documents in a secure, fire-proof safe or fire-proof cabinet. Take steps to ensure your Successor Trustee or Executor will be able to find these documents if necessary. Your attorney may recommend a set of originals of your Living Trust documents be kept on file at the attorney s office. Follow any instructions provided by your attorney for storing your estate planning documents. Review your Living Trust, Pour-Over Will, and other estate planning documents once a year and any time you experience a major life event, such as marriage, divorce, birth of a child, death of a family member, relocation to another state or country or transfer of a significant asset. If your Living Trust, Pour-Over Will or any other estate planning document needs updated, never write on the document. Consult your attorney for guidance on the proper method of amending or replacing the estate planning document. Additional tasks required to create and fund your Living Trust may be written below: