You were excited to hear that your father finally listened to all your suggestions and established a Revocable Living Trust. Sure, he already had a Will in place, but since he had always talked about finding ways to help his loved ones avoid probate upon his passing, adding a carefully-crafted Trust to his estate plan simply made sense.

And yet, here you and your siblings are—still dealing with a lengthy and costly probate process almost half a year after his passing that all of you were convinced was eliminated from the equation. How can this be?

Unfortunately, the answer is in the details.

Dad’s Trust May Have Never Been Funded

First things first … a few quick words on probate administration. When a person passes away in Texas with assets in their name, those assets are often subject to probate, an important legal process where their Will is validated, heirs are determined, assets are inventoried and appraised, debts are paid, and assets are ultimately distributed. All of this happens under a judge’s supervision, but most people prefer to avoid it because it is complex, drawn-out, costly, and emotionally draining. As we explain to our clients, one of the best ways to do that is through a Trust.

There are actually several ways to potentially avoid probate, but establishing a Trust is the most common. Unlike a Will, which does not take effect until after you die, a Trust starts immediately and covers death and incapacitation. It also does not have to go through probate since there is no open record of its contents.

With all of that said, one of the few reasons a Trust would STILL be subject to probate is that it was never funded.

What Does It Mean to Fund a Trust?

When we say “fund,” we are talking about transferring the titles (or ownership) of your assets from your individual or joint names to the Trust name. Depending on what type of Trust you have established and your unique situation, this could include everything from your house to bank accounts, life insurance policies, vehicles, important personal items, and safe deposit boxes.

So, in the situation at the beginning of this article, Dad may have done the hard work by creating a Trust, but if he never transferred ownership of his assets to live under the umbrella of the Trust (his home, accounts, other assets), those assets would likely end up going through probate because they remained in his individual name.

This is one of the most common misconceptions about Trusts. Many families and loved ones believe that they are covered simply by signing the Trust paperwork. In reality, a Trust only controls the assets that have been transferred into it. If nothing is transferred, or only a few assets are in the Trust, it will not work the way the family expects.

As a reminder, assets commonly transferred into a Trust can include:

• Real estate
• Bank accounts
• Brokerage accounts
• Stocks, bonds, mutual funds
• Business interests
• Certain personal property (jewelry, artwork, collectibles, etc.)
• Safe deposit box contents
• Mineral rights

What Happens Next With Probate?

If a Trust has not been funded, the result could be a painful surprise to many families—including yours. Your loved one’s assets cannot pass through the Trust automatically, so the court system may need to get involved to legally transfer ownership to where it needs to be.

Obviously, most people want to have a greater say regarding who will receive their property. This is where doing everything you can in advance to ensure you have a solid estate planning strategy is important.

Not only will you protect everything you own and everyone you love, but you may be able to avoid probate entirely.

Call Leigh Hilton PLLC Today!!

Having a competent attorney in your corner will help you and your family navigate the often overwhelming waters of protecting everything you own and everyone you love. That is our job, and we think we do it better than anyone else. Call Leigh Hilton PLLC so we can help ensure you and your family are taken care of in the best possible way.

Leigh Hilton PLLC wants to be your first call every time for any estate planning need. We look forward to serving you.