Congratulations! You have set up a Revocable Living Trust! You are doing things right being prepared for the future but there is more to do. Just because you created a Trust doesn’t mean your estate will stay away from probate. Proper asset ownership and full funding of the Revocable Living Trust is necessary in avoiding probate.
What Assets Avoid Probate?
The below assets automatically avoid probate after your death and so do not need to be funded. They actually cannot be funded.
- Retirement accounts, including IRAs, 401(k)s, and annuities
- Payable on death (POD) and transfer on death (TOD) accounts and, in some states, transfer on death or beneficiary deeds
- Life insurance
- Life estate property
- Accounts and real estate owned as tenants by the entirety
- Accounts and real estate owned as joint tenants with rights of survivorship
What Assets Require Probate?
The below assets require probate after death and so need to be fully funded.
- Contract assets naming your estate as beneficiary
- Accounts and real estate you own as a tenant in common
- Accounts and real estate titled in your sole, individual name [without a payable on death (POD) or transfer on death (TOD) designation]
What’s the Next Step?
Consult an experienced estate planning attorney to be sure your Revocable Living Trust is completely funded and to be sure all of your assets are aligned with your estate planning. Avoiding probate requires proper asset ownership.