What is a Trust?October 13, 2015
Probate: Formal Administration or Summary AdministrationOctober 26, 2015
In this final segment of my three part overview of what assets do not go through probate, I will discuss Trust Assets.
Assets that have been placed in a Revocable Trust prior to death avoid probate. However, if your Will establishes a trust (called a testamentary trust), those assets will go through probate because the legal title of those assets was held in your name until death. During the probate process, the assets you assigned to go to your testamentary trust in your Will are retitled into the name of your trust.
What are Trust Assets? Trust assets are any assets that are placed into a trust. When you place an asset in a trust, the legal title of that asset is held by the trust for the benefit of another, the beneficiary. You can place almost anything in your trust, including money, jewelry, real property, stocks, bonds, boats, and cars. You can even designate your Revocable Living Trust to be the beneficiary of any account with a beneficiary designation, such as IRAs, insurance policies, retirement plans, and some bank accounts.
Why create a Revocable Living Trust? There are many reasons to create a Revocable Living Trust. The main reason most individuals’ state when establishing a Revocable Living Trust is to avoid probate. Probate can be both expensive and time consuming. For individuals with a large amount of assets or individuals with unique family situations, such as a blended family or dependent children, setting up a Revocable Living Trust today could be a good idea for ensuring that your wishes are carried out as easily and smoothly as possible when the inevitable does occur.