Decluttering Your Revocable Trust
Establishing a trust can be a great source of relief when you are building your estate plan. If you choose a revocable trust, it is easier to overcome the hesitation. With a revocable trust, you are not signing away possession of your assets into the void, and if you change your mind about which assets you want the trust to own or how you want it to dispense payments to beneficiaries, you can always amend the trust instrument. Since trusts are non-probate assets, the probate of your estate will be simpler if some of your assets are in a trust; your heirs will receive their inheritance sooner, and the assets in the trust are not subject to creditor claims during probate. The popular image of trusts is that they are only for wealthy people, but another compelling reason to set up a trust is to protect your house from creditor claims during probate if you eventually enter a nursing home as a Medicaid beneficiary. Despite this, not all assets belong in a trust; it is better to let certain types of assets take their natural course of passing to the original owner’s heirs. For help answering your questions about establishing a trust so that it provides the maximum financial relief for you and your heirs, contact a Dade City estate planning lawyer.
Don’t Transfer Non-Probate Assets to a Trust
When a person dies, most of his or her assets become part of the person’s estate, and then the probate court oversees the distribution of the assets, first to creditors and the IRS, and eventually to the person’s heirs. Some types of assets are non-probate assets; this category includes not only trusts and the assets they contain, but also life insurance policies and death benefits from other types of insurance policies. It also includes bank accounts where the original account holder has listed a payable on death beneficiary. It is a bad idea to designate your estate as the beneficiary of a non-probate asset, because you are turning a non-probate asset into a probate asset. Likewise, you should not designate a trust as the beneficiary of another non-probate asset, because doing so introduces another level of red tape.
Don’t Transfer Personal Property to a Trust
According to probate law, all assets besides money and real estate count as personal property. Unless you own a collection of artwork, it is unlikely that your personal property is the most valuable part of your estate. Therefore, it is unlikely that it will complicate your probate case or that the court will order the personal representative to sell it to settle creditor claims. You should not set up a trust just for your personal property, because the costs of setting up a trust are significant.
Contact a Florida Estate Planning Attorney About Revocable Trusts
An estate planning attorney can help you decide whether to establish a trust and which assets to transfer to it. Contact The Law Office of Laurie R. Chane in Dade City, Florida to discuss your case.
Source:
msn.com/en-us/money/news/the-worst-assets-to-leave-in-a-living-trust-if-you-want-your-kids-to-avoid-probate/ar-AA1Nqn3s?ocid=msedgntp&pc=ACTS&cvid=69163b7698694c9fa86c9b669de94920&ei=23
