The Importance of Trust Funding and Asset Integration

             Living Trusts are a popular estate planning tool that can be used to provide for the care of the Trustmaker in the event of disability and direct the disposition of assets when the Trustmaker dies. Historically, Living Trusts were popular for the purpose of minimizing estate taxes and avoiding probate.  In addition, a Living Trust was typically revocable and the Trustmaker could change or amend the trust as circumstances changed in the life and legacy of the Trustmaker or in the law. Ultimately, a Living Trust was designed to provide directions to achieve the Trustmaker's estate planning goals.

            A Living Trust only controls assets that are either owned by the trust or for which the trust is named as the beneficiary.  As a result, it is imperative to "fund" the trust.  What is trust funding? Trust funding or asset integration is the process whereby assets are re-titled from the Trustmaker’s individual name (or joint names, if married) to the name of the trust. Beneficiary designations are also updated to reflect the trust as the primary beneficiary.  When properly funded, a Living Trust can avoid the public, costly and time-consuming court processes at death (probate) and at incapacity (conservatorship or guardianship).

             Why is funding so important?  Until a trust is funded it doesn’t own or control anything, and is therefore, ineffective. In order to achieve the Trustmaker's goals, every asset should be evaluated and a decision made regarding the proper title or beneficiary designation for that asset.  Assets that remain 'unfunded" or owned in the individual name of the Trustmaker will be controlled by the Trustmaker's Last Will.  This “pour over will” serves to distribute these assets to the Living Trust, thereby allowing the Trustmaker's directions to be followed.  Jointly owned assets, with rights of survivorship provisions, will become the sole property of the surviving owner. 

            Asset integration is arguably one of the most important aspects of your estate plan.  While attorneys will assist  or guide the Trustmaker through the trust funding process, ultimately, the Trustmaker is responsible for making sure all of the appropriate assets are transferred to the trust.

            If you have questions regarding proper asset ownership and asset integration with your estate plan, please do not hesitate to call on us at 407-977-8080 or visit our website at HoytBryan.com.  

Is it good to be “Traditional?”

            Let’s say there is a “traditional” scenario where the husband, Jim, works outside of the home and his wife, Annie, takes care of the children and the home.  In this “traditional” scenario, Jim feels it is his responsibility to provide for his family and, as part of that, to take care of all the finances.  He manages the bank accounts, the rental properties, the LLC that owns the rental properties, the investments, paying the bills, etc.  Jim is happy to relieve Annie of this responsibility and she is happy not deal with it.  But, what happens if Jim dies first?

            Does Annie even know what financial institutions hold their money?  What if paper statements don’t come in the mail?  How is she going to track down the accounts?  Even if she knows which institutions they transact business with, does she have the necessary login information? It could take months for Annie to track down all of the financial information she needs.  And, while Annie is performing this morbid scavenger hunt, she is grieving for her husband and continuing to raise the children.  While Jim was trying to protect Annie, he has unintentionally caused her a great deal of additional stress and anxiety at an already stressful time.

            Don’t let this happen to you.  With proper estate planning and counselling, you can minimize unintended consequences, leave your legacy how you want, to whom you want, and the way you want.

            If you have questions about your estate planning, don't hesitate to call 407-977-8080 or visit our website HoytBryan.com.  

Now You Get to Choose How You Die on Facebook

            The death of a user has always been tricky for Facebook and other social networks.  In theory, the Internet, and Facebook in particular, are the perfect venue for friends and family of the decedent to mourn the individual and share memories.  Unfortunately, and awkwardly, Facebook pages are not always in a condition where the decedent, or their loved ones, would want them to be preserved for the rest of time. 

            Until today, there was no way for a Facebook user to control, during lifetime, what happens to their Facebook account when they pass away.  Further, there was no way for a user to tell Facebook what they would want to happen to their account when they die.  A “close relative” could request the account be “memorialized,” which locks and forever freezes the account.  Or, the decedent’s close relative could petition for the account to be deactivated and taken down.  Another option was the users could simply give a loved one their password during their lifetime, handing over full control of their account, even during lifetime.  But, that is a violation of Facebook’s terms of service. 

            Today, Facebook announced a new setting that will give every Facebook user the option to have their account permanently deleted when they die.  Or, in the alternative, users can now designate a “legacy contact,” - a friend or family member to take control of certain aspects of their account after death.  Upon the user’s death, the legacy contact will be authorized to change the decedent’s profile picture and cover photo, write a special post that would be pinned to the decedent’s timeline, and accept friend requests from real-life friends and family of the decedent who were not connected during the individual’s lifetime.  Users will also have the option to allow their legacy contact to download an archive of the photos, posts and profile information of the decedent. 

The legacy contact will not, however, be able to post as the decedent or see the decedent’s messages.  Facebook considers this information private, even after a user has passed away.  Legacy contacts will also not have the power to edit or delete posts that the decedent shared in the past or posts others have shared on the decedent’s timeline.  So, designating a legacy contact will not save an individual’s Facebook memorial page from the embarrassing photos they may have posted over the years.  But, the option to change the cover photo and profile picture and pin a new post to the top of deceased person’s timeline will at least push unfortunate content further down the page where survivors can avoid seeing it. 

The ability for Facebook users to make their own choice as to whether they want their social media profiles to be immortal is a necessary change.  Hopefully we will see more tech companies following Facebook’s lead.  If you want to designate your legacy contact, here’s how you do it:

1.      Open your Facebook settings.  Choose Security and then Legacy Contact at the bottom of the page.

2.      After choosing your legacy contact, you have the option to send a message to that person.

3.      You may also chose to give your legacy contact permission to download an archive of the posts, photos and profile information you have shared on Facebook. 

4.      If you do not want a Facebook account after you have passed away, you can select the option to have your account permanently deleted at your death.