A Not So Obvious Estate Planning Mistake

working at desk

       You just got done signing estate plan papers with your attorney, and he summarizes everything you have just done,

“Today you completed your Estate Plan.  You have a pour over will that will act like a big broom and sweep all personal property into your Trust when you pass away if it isn’t already titled in the name of the trust.

 You have also created a revocable living trust where you can control all of your property as you are the initial trustee and when you and your husband die, the assets within the trust will be     distributed evenly among your children.

You have also named your responsible son, to hold your Springing Power of Attorney knowing that if you and your wife became incapacitated he would be able to step in and make sure the rental properties were being taken care of and make sure all of your financial needs are met.  You have also appointed him to be the successor trustee to manage the distribution of the estate.

In addition to this, you have named your thoughtful daughter to be your agent for medical decision purposes. You have also instructed her as well as the rest of the family how you would like to be treated if you can no longer speak for yourself.

He says I would like to commend you in your preparation as well because you have even prearranged your funeral expenses and program.  Your children couldn’t have asked for an easier more thought out transition of your assets.  You must really care for them to have done all this work in advance.

         You arrive home, look at your wife, and smile.  Now you can relax knowing that your children will not have to deal with the probate process and the fighting that nearly split you and your siblings apart when your parents died.

Tragically, one week after the signing of the documents, you and your wife die while camping when a meteor hits your tent.

Your children find your binder with estate planning documents inside.  Your son takes the binder and approaches the banks where your accounts are held, the Realtor, and the DMV to begin transferring your assets as directed in the Trust.  Much to his surprise each of the institutions refuse to even talk with him about the assets.  Why?!?!?  It turns out that you and your wife neglected to fund the trust.  You did not actually convey title from yourselves to the Trust.  Your son now has to run all the assets through probate court in order to transfer the property into the trust in order to distribute them.  Wait a minute you think, what about that Pour-Over will?  That big broom ought to be worth something.  In fact, the Pour Over will is worth something.  The Will ensures that the property will make it into the Trust but it still has to go through probate.

Empty Trusts by themselves are useless.  Empty trusts coupled with a pour over will are useful and private but they still have to go through probate.  Funded Trusts are useful, private, and can be distributed very quickly.


If you wonder if you have any question as to whether your Trust has been funded please don’t leave it to chance.  Wes Winsor Law offers a free estate plan review.  Call now to set one up (435)669-9755 or schedule an appointment online here.

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