What happens to assets that I leave out of my living trust?
The first step in creating a revocable trust is to fund it. You are transferring the ownership of the property from you to the trust. You are the trustee and you have complete control over the assets. Stocks, bonds and bank accounts are all possible to include in the trust. Even small business interests are allowed to be included in the trust. Intellectual property, collectibles, and commodities can also be conveyed into the trust.
Newly Acquired Property
After you initially fund the trust during the creation phase, you may acquire additional property over the years. A living trust offers flexibility, which is one of its main advantages. You can easily add property to the trust at any time, and you should make an effort to do so.
The Probate Process
Another benefit is the fact that the distributions of the assets to the beneficiaries are not subject to probate. This is a legal process that would be necessary if you use a will as your asset transfer vehicle.
Probate comes with some drawbacks, and one of them is time consumption. It will take at least eight months, depending on the jurisdiction. Probate expenses also reduce inheritances. The loss of privacy is another major problem. The probate process is public so anyone with an interest can access probate records.
Failure to Transfer Assets to the Trust
Transfers of property in your direct personal possession at the time of your passing would be subject to probate. As a result, you defeat the purpose when you fail to convey assets to the trust.
Another negative is the possibility of an adult guardianship. You can appoint a disability trustee who will manage the trust if you become incapacitated. However, the disability trustee would have no power over the assets that are not in the trust.
As a result, the state would be petitioned to appoint a guardian to manage outside assets.
Minors
There is also the matter of a minor beneficiary. The successor trustee you name in your trust declaration will manage assets for the child beneficiary. Again, the court would be forced to appoint a guardian to account for property that is not held by the trust.
Pour-Over Will
You can prevent all these hassles if you take a simple step when you are developing your estate plan. A pour-over will is a document you can use to arrange for the transfer of personally held assets into the trust after your death.
The probate court would be involved, but the process is simple, straightforward, and predictable.
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There is also a contact form on this site that you can use to send us a message. If you are in the Tulsa area, our office can be reached at 918-615-2700.
Need help now?
If it is clear that you need to work with an Oklahoma City Estate Planning Attorney to put a plan into place, the time is now. You can schedule a consultation appointment right now if you call us at 405-843-6100.
There is also a contact form on this site you can use to send us a message, and if you are in the Tulsa area, our office there can be reached at 918-615-2700.
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors Read More! Larry Parman, Attorney At Law, has posted the latest posts on his blog.
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