18 May If I Create a Revocable Living Trust, Do I Still Need a Will?
If I Create a Revocable Living Trust, Do I Still Need a Will?
By: Barry E. Haimo, Esq.
May 18, 2015
HAIMO: Creating a revocable living trust does not eliminate the need for a will. If you pass away with assets in your name, they will still have to go through probate proceedings. Most likely, the will will transfer such property to the trust. However, if you don’t have a will, the property will have to go through probate, and the state of Florida will determine who your beneficiaries are for you.
A revocable living trust provides you with two options, and you should use both of them to make sure you “catch” all of your assets.
- Manually transfer new assets into the trust. The beauty of a revocable living trust is that it gives you the ability to continually add new assets to it as you gain them. This is something you should periodically do with your trust administration attorney to ensure that everything you want to be in the trust is actually there.
Depending on your age, this is something that you may wish to do every few years, or whenever you attain substantial new assets. Revisiting your revocable living trust to add assets can also provide you with a great opportunity to make sure it complies with any laws that have changed since you originally created it.
- Create a pour-over will. A pour-over will lets your lawyer transfer any assets that are still outside of your trust at the time of your death into that trust. In effect, it’s a safety net of sorts that “catches” any leftover assets you either forgot to put in your trust or weren’t able to transfer in time.
Why should you still do the first step if you can just catch everything left out with the second step? Because even though those assets will eventually make their way into your trust, they will have to go through probate first. If you have loved ones who are counting on those assets, this means they will likely have a lot longer to wait before they can access them.
Funding a Trust: The Step You Can’t Forget
Both options mentioned above involve funding your trust. Some people don’t realize that creating a trust is just the first step in protecting your assets. You can craft an amazing trust designed to do exactly what you want with your assets, but that trust does absolutely nothing for your assets until you actually put them in it.
This process is called funding your trust. It involves changing the titles of your assets so they are no longer in your name but rather the name of the trust. Essentially, you’re legally saying you don’t own them anymore – the trust does. With certain kinds of assets, this means changing the beneficiary designation so your trust becomes the beneficiary.
If you don’t do this, you can still fund the trust after your death using a pour-over will, but that means not getting one of the most important benefits a trust can bring – avoiding probate.
Estate planning can be a complicated and confusing process, but it doesn’t have to be if you do two things: start early and work with an experienced Florida estate lawyer.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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