Extension Office: Living Trusts as An Estate Planning Tool

To prepare for an ever-changing financial future, Montana State University Extension educators suggest couples should designate a “contingency day” to review finances and re-examine their financial lives. “The same suggestion applies for a single individual,” added Kaleena Miller, Madison-Jefferson County Extension Agent.

Marsha Goetting, MSU Extension Family Economics Specialist, suggests that the contingency day take place once a year – perhaps on an anniversary, birthday or another easy-to-remember date – to help plan for your financial future. The other reason is to make “things” easier for your heirs. “I receive many calls from distressed parents whose adult children have died and they have no idea where to find the necessary papers to determine if a probate should be held,” said Goetting.

Start with a review of the location of your financial papers, such as insurance policies and investment information. Do you have a list of where your important papers are? MSU Extension has a MontGuide “Your Important Papers: What to Keep and Where” that would be a helpful tool during this process https://store.msuextension.org/publications/FamilyFinancialManagement/MT199611HR.pdf

A systematic plan for keeping track of important papers which come into your home can save hours of anxious searching, can help preserve peace and harmony and make it easier to cope with emergency situations. Record-keeping, however, is more than merely a matter of neatness and order.

Legal and safety factors enter in as well. Some records and papers are best kept in a home file for ready access, while others should be left with your attorney or placed in a safe-deposit box or in a fireproof, waterproof, and burglar-proof home safe. “A good rule to follow is to keep the item at home unless it is a legal document that is difficult to replace or duplicate. In that case the document should be kept in a safe-deposit box or left with your attorney,” suggested Goetting.

On your contingency day review the beneficiary designations on your life insurance policies. Do financial accounts have payable-on-death beneficiary designations? Do the investments have transfer-on-death registrations? Would a transfer-on death deed for the house be a good idea? Remember, PODs, TODs and TODDs are legal documents that allow the owner’s estate to avoid the expense of probate. “Another important item to discuss is whether all accounts have listed secondary beneficiaries in case the primary beneficiary passes away before the owner of the account,” said Miller.

Do you have a filing system for household records? If you are a married couple, ensure both individuals understand the filing systems and, if asked, whether they could produce the homeowner’s insurance policy or the deed to the house. “His and her filing systems can work provided both understand the other one’s system, said Goetting.

“Where are copies of the will or trust located? Are they in a safe deposit box.? If so, with what financial institution?” said Kaleena Miller, Madison-Jefferson County Extension Agent.

At one point this past summer Montana had 72 fires burning. “This reminds me the need of a Grab-n-Go Emergency Bucket, Box, or Backpack for Montanans living in or near forests,” said Goetting. Because an emergency can arise quickly and there is not enough time before an order to evacuate, a family can put together a “Grab-n-Go” Emergency Bucket or Tote/Backpack.

“This emergency pack can contain copies of important papers to quickly take without thinking: Credit and banking information, driver’s license, birth certificates, insurance information including auto, health, medical, and home, any important medical information such as medication and immunization records, household inventory list of usernames and passwords for accounts accessed on the Web, extra set of keys to auto, home, safety deposit box or safe, and enough cash to purchase fuel for vehicle, food, and lodging for several days,” suggested Miller.

Paper copies of “Your Important Papers: What to Keep and Where” can be requested from the Madison-Jefferson County Extension office at 287-3282.