Failing to fund a revocable trust

Fund the Revocable Trust

I have seen a number of clients come through the office over the past few months who, usually in the process of trying to sell an inherited home, that either through oversight, or lack of information given to them by the attorneys who assisted them with their estate planning documents, failed to fund their revocable trusts properly. In the majority of these cases, the asset they consistently failed to place in the name of the trust, real estate, was not properly placed into the trust. When these individuals then attempted to sell the property, the title commitment came back and it became evident, that either formal or summary administration in a probate proceeding would be required in order to sell and convey title to the property.

Avoid Costly Probate

Interestingly, upon review of the wills in many of these cases, contained standard pour-over-provisions, wherein the residuary clauses of the wills devised the assets to a revocable trust which had been created by the clients. Unfortunately, the efforts these clients in Fort Lauderdale, Boyton Beach, Palm Beach, Hollywood, Broward county had made and the funds they had expended in trying to ensure that their heirs could avoid costly probate and timely probate proceeding upon their death were all in vain because they had failed to properly convey title to the real estate to the trustees of the revocable trust they had established.

Fatal Trust Mistakes

It is pointless, to establish a revocable trust and not place the assets you would like to pass according to the terms of the trust, into the trust. This principle pertains to bank accounts, brokerage accounts, real and other tangible and intangible assets. If the primary objective, is, as it is in most cases, to use a revocable trust fort lauderdale as a probate-avoidance mechanism, failing to convey or assign assets to the trustee of the trust as required, is a fatal mistake.

Consult an Attorney

It is possible that many of these people had used self-help forms purchased online and did not comprehend how all the pieces (in this case the estate planning documents) all fit together. Thus, while it is easy to do the forms online and may cost less, estate planning is a complex process and it is better to consult with an attorney who can look at all your assets, come up with a plan that makes sense, and then have you take the steps necessary to execute the plan. I always try to formulate the simplest, most cost-effective estate plan for clients based on you and your intended beneficiaries’ circumstances.

Minimize Tax Liability

It is crucial that estate documents, which may consist of a will, revocable or irrevocable trusts, durable power of attorneys, enhanced life-estate deeds(or ladybird deeds) and advance directives (living wills and designation of health care surrogate are done in a cohesive fashion which ensures minimization of estate and income taxes, potential probate costs as well as proper distribution of your assets to loved ones when you pass.