Unfortunately, despite what most people believe, the answer to this question is not always “No”. Yes, a properly drafted living trust is very effective at avoiding probate of your estate at death; however, there are several situations which can arise which will require some, or maybe even all, of your assets to still have to go through probate. In fact, many of the probate cases I handle for my clients are for one or two assets that were just not in the decedent’s living trust.
One primary reason for this is that when people create their living trust, especially when they try one of the “do it yourself” methods, they fail to properly “fund” the trust. What this means is that they do not re-title all of their assets like real estate, bank accounts, and brokerage accounts into their living trust.
Another reason for this is that people simply fail to review their trusts and assets on a regular basis to ensure that they are still funded in their trust. For example, it is extremely common that when you refinance your home, the lender will require you to pull the property out of your living trust to fund the loan. After escrow closes, people often forget to put the property back into their trust and then, when they pass away, they have a piece of real property out of their trust that requires a probate action to put it back in the trust.
Problems like this can be avoided by many easy steps. The most obvious and least expensive way to do this is to be sure all of your assets are funded in your trust and to have an annual trust review. Another important step really goes back to the formation of your estate plan and having the proper contingencies in place. This is in the drafting language in the living trust and all the supporting documentation to your living trust. With proper planning and evidence, there are ways to petition the court to transfer assets back into your living trust, even after your death, without a formal, lengthy, and expensive probate proceeding. To find out more about how you can ensure your living trust will avoid probate, call Amy Alvis at Alvis Frantz and Associates, A PC at (925) 516-1617.
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