The Importance of Your Last Words

November 13, 2023    |    Sage Capone

A Hawaii Trust is an estate plan document that instructs who receives property from the trust once the trustee has passed. Unlike a will, a living trust or estate plan will avoid probate. At Estate Planning Consultants Hawaii, we help our clients establish these goals. Our client, the trustor, will establish a living trust in which they become the trustee of while alive. In this case, the trust will be revocable in which they can amend while they are alive such as cancel or modify beneficiaries. In the trust, our client will name a successor trustee and beneficiaries. Upon the death of the trustee, the trust will become irrevocable, and no changes will be allowed. This means their wishes will be granted as final. The successor trustee will have the responsibility of dispersing the assets within the trust. This is the next step of executing a trust or estate plan.

Many steps taken upon the death of your loved one will be straightforward. The funeral home will assist you in ordering death certificates for all your financial needs. You will need this information for bills, insurance, banks, and investment accounts. It’s important to obtain a long-form death certificate which should be you filing a life insurance claim.  Most cases, an estate plan with a living trust includes a will. Make sure it is a pour-over will to account for any assets that need to be held by the trust. Should the trustee be different from the executor of the will, it is best to stay in close contact with the executor. Sometimes assets may be not listed in the trust and the responsibility of the executor is to transfer them to the trust in which you will now be responsible to distribute.

Administering the trust involves a concise and organized system of contacting all beneficiaries. Some trusts do not specify names of beneficiaries. Should they list “heirs” or “issues” and you are unfamiliar with the language of the trust it is best to contact a professional knowledgeable with estate planning. It is essential you carry out this part of the estate plan correctly. The financial planner or estate planning company listed on the first few pages of the plan is essential to contact as they will have much of the information needed you are looking for. You will need to obtain a federal tax information number from the IRS. This allows you to accurately report the gains and losses of any properties listed in the trust before the property is distributed to any beneficiaries. Contacting the beneficiaries can be done so by a formatted letter or a phone call. Lasty, you should watch the mail for several months after the death of the trustee to pay debts to attorneys, financial companies, or medical professionals. It’s best to leave open the trustee’s bank account for several months to pay bills and track any last transactions such as social security payments. Once all debts are paid you can begin the final task of distributing the assets to any or all beneficiaries.

As you can see, creating a Living Trust or Estate Plan is crucial should you own property or have any assets. This simple task while you are alive will allow you the freedom of making sure your wishes are granted upon your death.