What's in a Trust-Based Estate Plan?
- Katie Noles
- Mar 21
- 2 min read
A Trust-Based Estate Plan is a comprehensive legal arrangement that includes a Revocable Living Trust and other associated documents to manage and distribute an individual's assets during their lifetime and after their death. This type of estate plan provides flexibility, control, and privacy while often avoiding the probate process. Here are the key components of a typical Revocable Living Trust Estate Plan:
Revocable Living Trust:
Primary Function: The central document in the estate plan, the Revocable Living Trust, allows the individual (trustor/grantor) to transfer ownership of their assets to the trust during their lifetime. The trustor retains control and can make changes or revoke the trust if needed. Upon the trustor's death, the trust becomes irrevocable, and its terms dictate the distribution of assets.
General Transfer:
Primary Function: This is the “oops” document that would put assets into the trust if you did not do so. The General Transfer and Pour-Over Will work together to show the trustor's intent to fund their Trust fully. Assets passing by these means will be required to go through probate, but the Estate may not be subject to the full probate process.
Pour-Over Will:
Primary Function: It "pours over" assets not transferred to the trust during the grantor's lifetime, directing them into the trust upon the grantor's death. It also allows for the nomination of guardianship for minor children. Be cautious NOT to rely upon this as a primary mechanism for funding.
Durable Financial Power of Attorney:
Primary Function: Designates an agent (attorney-in-fact) to handle financial and legal matters on behalf of the individual for non-trust assets. In most states, this can take effect immediately or in the event of incapacity. This document is effective during the individual's lifetime and can help avoid needing a court-appointed guardian or conservator if the individual becomes incapacitated.
Advance Health Care Directive (Health Care Power of Attorney and Living Will):
Primary Function: This names a health care agent to make medical decisions on the individual's behalf if the individual cannot do so. The Living Will portion outlines the individual's wishes regarding life-sustaining treatments and end-of-life care.
HIPAA Authorization:
Primary Function: Allows the designated individuals, typically family members or health care agents, to access the individual's protected health information under the Health Insurance Portability and Accountability Act (HIPAA).
Tangible Personal Property Memorandum (TPP):
Primary Function: A separate document complements the Revocable Living Trust, allowing the grantor to list specific personal items and their intended beneficiaries. This provides a flexible way to distribute sentimental or valuable items.
Trust Certification, Certified Extract of Trust, Trust Abstract, or Affidavit of Trust:
Primary Function: A condensed version of the Revocable Living Trust provides financial institutions with information about the trust, allowing the trustee to manage trust assets without disclosing the entire trust document.
By working together, these documents create a comprehensive estate plan that addresses financial, legal, and health care matters during the individual's lifetime or incapacitation while ensuring a smooth and efficient distribution of assets after their death.
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