Does your estate plan need a revocable trust? The answer depends on the types of property you own and the goals you have for your estate plan. An estate plan should be prepared to solve your specific current and foreseeable issues – no more or less. When clients don’t own any probate assets, a revocable trust may not be useful. If clients own property or have goals that would complicate the probate process, however, we may want to avoid probate altogether through the use of a trust.

Kiplinger’s recent article entitled “What Assets Should Be Included in Your Trust?” says that a revocable living trust is a document that’s created to protect your assets during your lifetime. It also creates a way to seamlessly pass your assets at your death. The biggest benefit of creating a trust is avoiding probate. Placing your important assets in a trust can give you peace of mind knowing assets will be passed onto the beneficiary you designate, under the conditions you choose and without first undergoing a drawn-out probate process.

Many people think that once they sign the trust documents at their attorney’s office, they’re good to go. Setting up a trust is just half of the job. For a revocable living trust to take effect, it should be funded by transferring assets into the trust. You can fund a living trust with real estate, financial accounts, life insurance, annuity certificates, personal property, business interests and other assets.

People often ask if it’s wise to place their house in a trust. Considering that your home is potentially one of your largest assets, living trusts can be especially beneficial. A trust can transfer real estate quickly. They also help avoid the hassle of separate probate proceedings for land, commercial properties and homes that are owned out of state or held in different counties. However, property with a mortgage must be retitled in the name of the trust. Some lenders may be reluctant to do this.

There are several types of financial assets that can be owned by a trust, here are some examples:

• Bonds
• Stock certificates
• Shareholders’ stock from closely-held corporations
• Non-retirement brokerage and mutual fund accounts
• Money market accounts
• Cash
• Checking and savings accounts
• Annuities
• Certificates of deposit (CD); and
• Safe deposit boxes.

While creating a trust can seem to be costly and complex on the front end, it can make the inheritance process much easier on your beneficiaries. To ensure your trust performs as it is intended, schedule a consultation with one of our experienced estate planning attorneys.

Reference: Kiplinger (Jan. 16, 2022) “What Assets Should Be Included in Your Trust?”