Assets That Don’t Belong in a Trust
When an estate planning lawyer advises you to establish a trust, you might be surprised. The popular image of trusts is that only wealthy people have them, and you certainly do not feel wealthy. The reason you are consulting an estate planning lawyer is that you are worried about not having enough money, not because you are worried about having too much. For example, if you do not have hundreds of thousands of dollars in liquid assets, and you do not have long-term care insurance, you may need to enter a nursing home as a Medicaid beneficiary, and the best way to ensure that the probate court does not force your heirs to sell your house to settle its debts to Medicaid is to establish a trust and transfer your house to it. In other words, trusts are not a catch all solution for avoiding creditor claims and taxes during probate. If you are considering establishing a trust as part of your estate plan and are wondering which assets you should transfer to it, contact a Washington, D.C. estate planning lawyer.
Only Transfer Assets to a Trust If They Would Otherwise Go Through Probate
Trusts are non-probate assets. When a person dies, all of that person’s property becomes part of the estate, except the non-probate assets. The probate court then ensures that the estate pays its outstanding debts before it settles and the heirs receive their share of the estate. A main reason that people establish trusts is because they want their money to go to their heirs instead of to creditors. The property in a trust can pass to the beneficiaries in whatever manner the grantor of the trust indicates in the trust instrument. The trust can pay the money in a lump sum or in installments to the beneficiaries upon the grantor’s death, or they can even start receiving payments while the grantor is alive.
Trusts are not the only kind of non-probate asset, though. For example, life insurance policies and bank accounts with a payable on death beneficiary do not go through probate. If you transfer these assets to a trust, or make the trust a beneficiary of them, it will add steps before the heirs can receive the money.
Cheap Stuff Belongs in Probate Court, Not in a Trust
Establishing a trust can cost several hundred dollars, or even more than a thousand, and that is only if you designate a family member as the trustee. If you appoint a professional trustee, then this adds even more expenses to the costs associated with the trust. Therefore, it is usually not worthwhile to transfer personal property such as vehicles or furniture to a trust. Those items are not valuable enough to cause problems if they go through probate.
Contact Tobin O’Connor Concino P.C. About Establishing a Trust
A Washington, D.C. estate planning attorney can help you establish a trust in the right manner and for the right reasons. Contact Tobin O’Connor Concino P.C. in Washington, D.C. or call 202-362-5900.
Source:
msn.com/en-us/money/news/the-worst-assets-to-leave-in-a-living-trust-if-you-want-your-kids-to-avoid-probate/ar-AA1Nqn3s?ocid=msedgntp&pc=ACTS&cvid=69163b7698694c9fa86c9b669de94920&ei=23
