To many, the best reason to create a Revocable Living Trust is to avoid probate and put a quick end to the estate administration process. However, a trust needs to be funded for it to have any real effect on the probate and estate administration process. Here are four types of property that are commonly used to fund a Revocable Living Trust:
Real estate is the most common property type found in a Revocable Living Trust. The simple reason is that real property usually makes up the bulk of a person’s estate and can be the difference between the estate going through a full probate process or merely being subject to small estate administration. Typically, when the trust is drafted, a quit-claim deed is drafted at the same to transfer the property to the trust.
Most bank accounts that are solely owned, as opposed to jointly owned, should be placed into a Revocable Living Trust. This not only helps to avoid probate, but also to allows for easy access to funds by successor trustees if you should ever become incapacitated. However, a small Joint account or a small account with a beneficiary designation may not need to go into a Revocable Living Trust to avoid probate, since they would automatically pass to the joint owner or beneficiary.
Placing cars and other vehicles into Revocable Living Trusts is sometimes discouraged due to liability concerns and issues that may arise with the Department of Motor Vehicles and auto insurance agencies. Exceptions are often made if the automobile is an antique or show car that is not driven daily or worth a considerable amount of money.
Small Business Interests
Transferring your small business interest into a Revocable Living Trust should be discussed with an Encino will and trust attorney who is experienced in business law. This type of transfer can be useful if you’d like someone to immediately assume your business responsibilities after your passing. Keep in mind that there may be complications depending on the type of small business structure you have an interest in.
If you would like to get more information about the types of property you should place in your Revocable Living Trust, or if you’d like to have your existing estate plan reviewed to make sure you’re protected in your current situation, please set up an appointment with our Encino will and trust lawyers by calling (818) 905-6088.