Is Your Estate Plan Empty?

Posted by Ralph Sklar @ 09:00am on October 5, 2016

In California, many people set up trusts as a basic part of their estate planning. But attorneys will tell you that many of those trusts are never funded, so they don’t accomplish a primary purpose of avoiding probate. When you left your Estate Planning Attorney’s office with your shiny new living trust did you put it in a drawer and forget about it, or did you remember to make it the owner of your investments, accounts, and real estate? Have you continued to title all new accounts to it? If you forget to title assets to the trust, they may still wind up there so long as you have a ‘Pour-Over Will.’ A ‘Pour-Over Will’ is a document that basically says, ‘take everything that I forgot to put in the trust while I was alive, and put it there as soon as I die.’ The downside is that assets transferred by will may have to pass through ‘Probate’ – which can be slow and expensive. If you choose not to put some accounts into your trust while you are alive, you may be able to file a beneficiary designation to transfer ownership to the trust at death and still avoid probate, but keep in mind that there are good arguments for probating certain assets. The key is to make sure that things happen on purpose, rather than by neglect.