Estate Planning

Your Trust and Its Schedule A.

By Jennifer Sawday

Does your living trust have a Schedule A attached to it? If your answer is No, do not past go and contact your estate planning attorney now to prepare a Schedule A.

If your answer is Yes, stop and review the following questions:

1. Is your Schedule A up to date?
2. Does it list all of your assets in your trust?
3. Does it list all of your real estate holdings?
4. Does it list your business interests? Corporations? LLCs? Partnerships?
5. Does it list your promissory notes and IOUs you hold?
6. Does it list all of your bank accounts and brokerage accounts?

If you consider your Schedule A, up to date -- check the titling of all of your assets that you have listed on this Schedule. Do the titles of the assets state that they are held in the Trust? Have you prepared assignments or other transfer documents to put your assets in the Trust?

In California, Schedule A can be evidence that you intended to transfer an asset to your trust and a court order can be obtained effectuating this transfer if you pass away before you had a chance to transfer the asset to your trust. It is called a Heggstad Petition among attorneys (named after a case). It is a useful mechanism to avoid probate in some instances.

There are some assets that should not be titled into your trust. Generally they include retirement accounts and life insurance policies. But even with these kinds of financial products, you need to discuss with your attorney whether in your situation you need to treat your retirement accounts and life insurance policies differently.

Of course, it goes without saying that if you are confused or not sure, consult with your estate planning attorney regarding your living trust and its Schedule A to make sure it is up to date.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

Full post as published by Estate Planning Practice Blog on November 21, 2008 (boomark / email).