Attorney
Revocable trusts have become an increasingly popular probate-avoidance tool among California residents. Under the umbrella of a revocable trust, assets are protected from passing through a lengthy and costly probate process. However, this only holds for assets retitled in the name of the trust.
An experienced California estate planning attorney can easily help you set up your trust. However, it is your obligation to transfer ownership and title of your assets to the trust, otherwise known as “funding” the trust.
What Happens if I Fail to Fund My Trust?
Once your trust is established, your estate planning attorney will guide you regarding which assets should be transferred into your trust and the steps necessary to do so. Whether by confusion, negligence, or forgetfulness, many fail to fully retitle assets to their trust, leaving the trust under-funded. Similarly, ongoing management of assets and trusts isn’t often emphasized, and it’s not uncommon for assets later acquired to be left outside of a trust.
When a trust isn’t fully funded, the purpose of using a trust as a probate-avoidance tool is diminished. A trust only protects assets under its umbrella. Assets outside of the trust are subject to dispensation through probate.
How Can I Protect Assets Outside of My Trust from Going through California Probate?
Any asset not retitled or assigned to the trust is legally subject to probate. The California probate process is a protracted, costly means of determining ownership and distribution of estate assets. This can be an especially taxing ordeal for your loved ones to endure.
Two paths might prevent assets falling outside of your trust from passing through probate:
1. File a Heggstad Petition
A Heggstad Petition asserts the trustor intended to include the “forgotten” asset(s) in the trust. The success of this petition largely depends on available proof as to the trustor’s intent. After review by the court, a determination is made as to whether the asset should be redirected to the trust, or if it will be subject to probate.
2. Establish a Pour-Over Will
A pour-over will is an essential supplement to the revocable trust. Pour-over wills offer added protection for any asset that may have escaped notice or wasn’t able to be transferred into the trust before the trustor’s passing.
While pour-over wills are subject to probate, the trust’s provisions guide the distribution of the assets. Even for those who believe they have fully funded their trust, a pour-over will is a good idea.
Can a California Estate Planning Attorney Help Me Fund My Trust?
If you live in California and have questions about funding your trust, contact our office today to speak with an experienced California estate planning attorney.
Trusts are valuable estate planning tools, but only to the extent they are properly executed. Whether you need clarification regarding the benefits of a trust, help with reassigning assets, or the safety-provision of a pour-over will, our legal team is ready to assist you.