Does Transferring Property To A Revocable Trust Make Things Worse?

Given the modest amount of effort it takes to establish a revocable trust and the vast amount of time and effort you can save your heirs by establishing one, it is a wonder that not everyone does it.  A revocable trust lets you be in control of the assets you transfer to it as long as you are alive, and to modify its terms as often as you choose, but after you die, it becomes like any other trust, a separate legal entity.  Therefore, it is not part of your estate that passes through probate; it is faster and less expensive for your heirs to inherit property from a trust than from your estate.  Many seniors who have gotten a running start on estate planning transfer property to revocable trusts.  Every asset that belongs to the trust feels like a win, because it is more for your heirs to inherit with minimal hassle.  Not all assets are appropriate for revocable trusts, though, especially assets that are automatically exempt from probate, anyway.  For advice about transferring property to your revocable trust or otherwise keeping it out of probate, contact an Orlando estate planning lawyer.

Assets You Should Not Transfer to a Revocable Trust

The ideal asset to place in a revocable trust is one that would have to become part of your estate and go through probate if it were not for the trust.  If there is a simpler way to keep the asset out of probate, it is better not to place it in the trust.  These are some assets that do not belong in a revocable trust, because there are easier ways to keep them out of probate:

• Life insurance policies – When you die, the payout goes straight to the beneficiary. If you do not want a family member to receive the life insurance payout in a lump sum, list your trust as the beneficiary of the policy, and then let it pay out the money to your family member pursuant to the trust instrument.
• Motor vehicles – Instead of transferring the car to a trust, you should amend the title so that the title of the car passes to your intended beneficiary after you die.
• Bank accounts – If you list a transfer on death (TOD) beneficiary for your checking or savings account, the beneficiary will inherit the account without it going through probate.
• Retirement accounts – It is possible, although messy, to transfer an IRA or other retirement account to a revocable trust. A better idea is to make your trust the beneficiary of the account.

An estate planning lawyer can help you think through the simplest ways to transfer property to your heirs.  In some cases, giving property to your family members while you are alive is even simpler than a revocable trust.

Contact Gierach and Gierach About Revocable Trusts

An estate planning lawyer can help you avoid getting too carried away with transferring property to a revocable trust.  Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.

Source:

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