Does a Revocable Trust Allow My Assets to Pass Outside of Probate Automatically?

One of the best tools estate planning attorneys in Jacksonville utilize for their clients is the Florida revocable trust. The revocable trust is also known as a living trust.  A revocable trust has many benefits including the ability to help individuals avoid probate.  However, many people do not realize that setting up an estate plan with a revocable trust in Jacksonville is not the final step to avoid probate in Jacksonville or around Florida.

Once the trust has been established, the settlor, or the creator of the trust,  or another person must fund the revocable trust.  Funding the trust is the process of transferring assets from the settlor’s name to the revocable trust.  To do this, the settlor must physically change ownership or the beneficiary designation, or in some cases both from the settlor’s individual name (or joint names, if married) to the name of the revocable trust.

As many as 9/10 estate plans fail because funding was not done, was not complete, or was done incorrectly. As a result, we now offer trust funding as part of many of our estate planning packages.

The client can view the revocable trust as a vehicle for bypassing probate.  However, if the client does not actually transfer assets into the vehicle, then the assets will essentially be left behind in the decedent’s estate.  While many probate lawyers recognize this problem, few offer a reasonable solution to the individuals who are creating a plan.  Any assets in the probate estate at the time of death must pass through probate.  If an estate has many probate assets, then funding the living trust can be tricky due to the different rules for certain assets.

Each type of asset requires a different procedure to effectively transfer into the living trust.  Here are some examples of how assets are commonly transferred into a revocable trust.

How to transfer Land, a Home, or Real Property to a Revocable Trust.

The first type of property a settlor may transfer into a revocable trust is real property.  An example of real property is a person’s house.  To transfer real property into the revocable trust, the settlor must execute a new deed reflecting the name of the client’s trust.  This deed must be notarized and recorded in the county where the property is located.

How to transfer a Loan or Security Interest into a Revocable Trust.

The second type of asset that a settlor may transfer into a revocable trust is known as a security interest.  A security interest is often a loan that is secured by collateral in a legally binding agreement.  A common type of security interest is a mortgage on a house.  Usually, the bank uses the house itself as collateral, so if the homeowner does not pay his or her loan payments then, the bank can take the house.

To transfer a security interest into the trust, the settlor must execute an assignment of the contract/deed of trust reflecting the name of the trust.  Further, the settlor must notarize the deed and record this in the County where the property is located.

How to transfer a Bank Account to a Revocable Trust

Bank accounts may also be transferred into a living trust.  The settlor must provide the bank with the copy of the Trust Agreement and then sign new signature cards as trustee of the trust.

How to transfer Stocks and Bonds to a Revocable Trust.

Living trusts are great tools to hold public stocks and bonds.  To transfer stocks and bonds into a living trust the Jacksonville estate planning attorneys at The Law Office of David M. Goldman PLLC recommend the client contacts his or her stockbroker or through the institution from which the assets were purchased.  This person or entity can then transfer the assets into the revocable trust or provide the proper forms to transfer the account to the revocable trust.

Similarly, private stocks and bonds may also be transferred to a living trust.  This is a relatively simple process that is accomplished by the owner surrendering the existing stock certificates and having new stock certificates prepared in the name of the trust.

How to transfer IRAs or other types of Retirement Accounts to a Revocable Trust.

Retirement accounts cannot be owned by a trust.  The proper way to deal with a retirement account is with a beneficiary designation.  If the living trust is created to deal with retirement accounts, the revocable trust can be the beneficiary of the retirement account.

If you have a Florida Estate Plan that is not funded and would like a complimentary review or for more information on how to transfer assets into a revocable living trust to avoid probate contact the Jacksonville Florida estate planning Lawyers at The Law Office of David M. Goldman PLLC today.

Contact Information