Many individuals choose to use trusts as part of their overall estate plan. Trusts are powerful legal tools, and they can provide many benefits to those who are looking to pass assets from one generation to the next.
One key element of trust creation is known as “funding” the trust. This means that you must actually transfer ownership of your personal assets to the trust. Assets that get left out of the trust may require some special treatment after your death. Keep reading below to learn all the details from an Oklahoma City trust administration lawyer.
Which Assets Are Controlled By My Trust?
The answer is simple. Your trust only controls the assets that have been placed inside it. Just because you create a living trust does not automatically mean that it controls all your assets. Assets that are in your individual name are still owned by you, and they are not considered part of the trust.
Some common assets that are placed into a trust include:
- Homes and other real property
- Bank accounts
- Investment accounts
- Collectibles
Putting your assets into a trust can help your loved ones avoid the lengthy and often expensive probate process.
Assets Not Included in Your Trust May Go Through Probate
A trust can be a great way to avoid the probate process, but any assets left out of the trust may still need to go through probate. This process can be time consuming and expensive, and it could cause your family additional stress in an already difficult time. If you go through the process of creating a trust, you should be careful to ensure that all the necessary assets are properly placed into the trust so that you get the benefits you were expecting.
Incapacity Planning May Be Affected
When you create a trust, you typically name a successor trustee to manage the trust in case you become incapacitated. However, your successor trustee may have difficulty if the assets were not properly transferred into the trust. This could prevent your successor trustee from having the legal authority to manage those assets, and that could lead to financial disruption or even a court-ordered conservatorship.
How Can I Avoid Leaving Assets Out of My Trust?
Now that you know some of the issues that may be caused by leaving assets out of your trust, you may be wondering how you can avoid these issues. One of the simplest ways to avoid this problem is by performing regular reviews of your trust and your overall estate plan. This review should include:
- Making sure all real property is titled in the name of the trust
- Assigning personal property to the trust
- Updating beneficiary information when appropriate
Estate plan reviews should be performed on a regular basis, and you should always review your plan after any major life event. Even if you have a trust in place, failing to put assets into the trust can lead to additional cost, delays, and stress over the probate process. Take the time to review your trust and overall estate plan today to make sure that it meets your needs and keeps your family protected.