Is Your Suitcase Packed?
Oct 03, 2022
When it comes to estate planning with a revocable living trust, I often use the suitcase analogy. When it comes to avoiding probate, a revocable living trust is like a suitcase. It is designed to take your things from one place to another, and there are many different levels of quality. My firm uses the best suitcases/trusts around, customized to fit our client's needs with a lot of standard features for "just in case" situations. But you have to pack your suitcase, or, in trust terms, you have to fund your trust with your assets to make sure they avoid probate and go where you want. If you don't and assets end up in probate after you're gone, it's not the fault of the suitcase.
Imagine a person buying the best suitcase in the world. They plan the best trip in the world, including what they'll do, when they'll do it, and the most appropriate clothing and accessories they'll need while there. They fly to their destination, bring their suitcase to their room, and open it up to unpack. Only then do they discover that most of their stuff is missing... because they didn't pack it.
Now imagine the person having a fit in the hotel room, yelling and screaming, that they paid all this money for a great suitcase that was supposed to contain all of the important stuff for their vacation, but most of it didn't reach the destination. "This suitcase is horrible!" they say. "It was supposed to bring all my stuff with me on vacation, and it's not here! The suitcase is worthless!"
Sounds ridiculous, right? It's not the suitcase's fault they never actually packed it. Unfortunately, that's what sometimes happens when the beneficiaries of a deceased loved one discover that the trust their loved one created wasn't completely funded, or there were account and asset changes over the years that never make it into the trust even though it may have initially been funded correctly.
In order to keep this process top-of-mind for our clients over the months and years after setting up their trust, we make sure to send out at least one e-newsletter every six months that contains an article on trust funding (https://www.plainenglishattorney.com/blog/the-importance-of-trust-funding). We also have a free webinar that discusses trust funding fails at www.trustfundingwebinar.com. Finally, there is also an entire course for sale regarding trust funding at www.trustfundingcourse.com.
When our clients want to make sure that their loved ones don't have to deal with the costs, delays, and other frustrations of probate when they are gone, we can help them put together a top-notch revocable living trust and other documents. However, the "suitcase" needs to be packed to be effective.
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