You are free to define the scope of the estate planning services you offer to your client. You can choose the level of involvement in funding the trust that you desire. You can direct the client to contact us for assistance, act as a notary for funding documents included in the binder, or simply follow up to ensure the formal transfer occurred.
As you determine what level of funding assistance to provide, keep in mind the following compliance guidelines:
- Your client is a trustee of their living trust. As a trustee, they have a fiduciary responsibility to manage the affairs of the trust. Paramount among their ongoing duties is to make sure trust is current and up-to-date at all times and that the trust is officially identified on the title to their assets. Make sure the scope of funding assistance you offer does not remove the client's fiduciary obligation.
- Remind your client of their fiduciary responsibilities for keeping their trust funded whenever you meet with them. Documenting that such a "reminder" is part of your standard operating procedures during your annual review appointments helps to limit against any accusations that you neglected to assist with keeping the trust funded.
- Every time you meet with your client, inquire about the ownership of assets. Ask questions like, "Is everything you own included in your living trust? Have you acquired any new assets that I am not aware of since we last met?" Routinely asking these kinds of questions helps limit your liability if any assets are not properly funded when the client dies.
- For instructions on how to fund any specific asset, follow the detailed funding instructions provided. If you are confused or are not sure which funding documents to use, contact us immediately.
- The trust document does not control assets owned outside the trust. Unless instructed otherwise by legal counsel, the general rule is that all asset titles should be changed to show the client's trust as owner.
- Assets with named beneficiaries - insurance policies, IRA accounts, etc. - do not need to be owned by the trust. Upon death, assets with named beneficiaries pass outside the trust and probate process and are distributed directly to the individuals named as beneficiaries.
- A deed evidences ownership of real estate. The legal description is a critical part of the deed. Check and double-check to ensure that the legal description placed on the new deed is an exact replication of the legal description on the existing deed. If the legal description is lengthy, it is often better to simply photocopy the legal description from the existing deed and attach it to the new deed. Do not photocopy anything from the original deed but the legal description. If anything but the legal description is photocopied, the County Recorder's office will return the deed for re-submission.
- Do not take completed deeds to County Recorder on behalf of the client. Provide a stamped, pre-addressed envelope, submission forms from the county (i.e., PCOR form if a property is located in California ), etc. - but the client should retain responsibility for the deed's actual submission. Once you take possession of original documents, you become legally liable for any undue delays that may occur.