In a trust-based plan, your Revocable Living Trust becomes the foundation of your estate plan. It contains your instructions for your own care and the care of your family if you become disabled, as well as for the distribution of your assets upon your death. A Revocable Living Trust allows you to keep your instructions and financial affairs private and ensures that your instructions are carried out efficiently without unnecessary judicial involvement.
You may amend or revoke their Revocable Living Trust at any time, but you must do so through a written instrument that complies with all the legal requirements for amendment or revocation.
With a trust-based plan, upon your death, the Last Will and Testament leaves any property that was not transferred to the revocable living trust before your death to your Revocable Living Trust. This is why it is often called a Pour-Over Will. The Last Will and Testament functions as a safety net to ensure that the property owned in your individual name rather than in the name of the Revocable Living Trust at the time of your death is ultimately managed by your successor Trustees as provided in your Revocable Living Trust. This is a second best case scenario, though. The goal is to avoid probate altogether by transferring all your assets to your Revocable Living Trust during your life. The Last Will and Testament is merely a backup document to ensure that the Revocable Living Trust ultimately controls all the assets.
The Durable Power of Attorney for property or financial management allows you to appoint an agent to act for you if you become incapacitated. The agent is authorized to transfer property to your Revocable Living Trust, to make withdrawals from your retirement assets, or to do anything else that you want the agent to do for you if you become incapacitated.
You should ask the first agent you are appointing to see if he or she is willing to accept this responsibility for you. If so, be sure he or she has the original or a copy of the Durable Power of Attorney document to prove his or her authority to act.
When you transact business on behalf of your Revocable Living Trust, you will sometimes be asked to produce a copy of your Revocable Living Trust document. Financial institutions and others who deal with you will want proof that your Revocable Living Trust exists, that they are dealing with the true trustee, and that the Revocable Living Trust gives the trustee the power to do what the trustee proposes to do.
Since the Revocable Living Trust may include personal or financial information that you may want to keep private, most financial institutions will allow the trustee to substitute a Certificate of Trust.
A trust transfer deed is the instrument that effectuates the transfer of ownership of real estate from you as an individual, to your Revocable Living Trust. The process of creating and then recording a trust transfer deed is how property becomes a trust asset (thereby avoiding probate, among other benefits).
The companion to the financial power of attorney is the Health Care Power of Attorney, sometimes known by different names including advance health care directive, medical durable power of attorney, or health care proxy, which permits the appointed health care agent to make health care, end-of-life, and postmortem decisions on your behalf when you are unable to do so on your own.
An Advance Health Care Directive, sometimes referred to as a living will, is a document in which you outline your specific wishes regarding your end-of-life care. When you are no longer able to speak for yourself because of a terminal illness or persistent vegetative condition, an Advance Health Care Directive can help the health care agent or doctor make decisions such as the following in accordance with your wishes:
Whether certain medications should be administered;
Whether pain management is desired;
Under what conditions, if any, artificial hydration and nutrition should be discontinued or artificial life support should be removed;
Whether the individual wishes to be an organ donor.
This is a legal document listing tangible personal property such as jewelry or furniture and the persons who should receive each item upon your death. It can be handwritten and signed and is a separate document from your trust or will, however, it is only valid if it is referenced in your Revocable Living Trust or Last Will and Testament.
“Let all things be done decently and in order.”
1 Corinthians 14:40 (NKJV)