Which Assets Do Not Belong In A Revocable Trust?
The probate courts aim to oversee honest dealings with the estates of recently deceased people. A relative who claims to have a copy of the decedent’s will must submit it to the probate court. This way, anyone who doubts the validity of the will may challenge it and get a judge to rule on the matter before any of the heirs receive their inheritance. Likewise, creditors have a chance to seek repayment of debts owed to them by the decedent before the decedent’s property becomes the property of the decedent’s heirs. If this though scares you, that creditors and infighting might gobble up your estate before the beneficiaries of your will can inherit it, then the best thing you can do is keep valuable assets from becoming part of your estate, thereby protecting them from the probate process and making them invisible to the probate court. You can do this by establishing a revocable trust or, if you dare, an irrevocable trust. For help strategizing about keeping assets out of probate with or without a trust, contact an Orlando estate planning lawyer.
Trusts Are for Turning Probate Assets Into Non-Probate Assets
Trusts keep assets out of probate, but they are not the only kind of non-probate asset. Of all the ways of keeping assets out of probate, trusts are the costliest, and they require the most work. You can transfer assets to a trust that would require you to pay more taxes during probate, or which the probate court might otherwise order the personal representative of your estate to sell to settle creditor claims. It is worthwhile to set up a trust if it is the difference between your son inheriting your house and the probate court selling it and using most of the money to satisfy debts that were still outstanding when you died.
Meanwhile, other assets are naturally non-probate. For example, life insurance policies and similar policies pay their death benefits to the beneficiaries directly instead of becoming part of the estate. Likewise, if you designate a payable on death (POD) beneficiary for a bank account, the POD beneficiary becomes the new owner of the account with no involvement from the probate court. It is a mistake to list a trust as a beneficiary of these other non-probate assets, because it makes matters more complicated.
No One Cares About Your Personal Property, Not Even Creditors, or the IRS
It is worth the expense of establishing a trust if you will transfer real estate properties or large amounts of money to it. It is not worthwhile if you only plan to transfer personal property. Most likely, the probate court will not interfere with your personal property. If it is especially important to you that a particular relative inherits a particular piece of personal property, you should give the item to the person while you are alive.
Contact Gierach and Gierach About Trusts for Asset Protection
An estate planning lawyer can help you if you are worrying about creditors reducing the value of your estate before it settles. Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.
Source:
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