When you created your Trust you did so with the intent to avoid a living and death probate, right? Yes, you did!
During your life you must always remember that you have a Trust and make sure all financial assets are “funded” or titled to the Trust. Why? Depending upon the value of the assets, if they are not properly titled to the Trust, your loved ones may go through a probate proceeding. In Arizona, if you own assets (investments, securities, cash, bank accounts, etc) in your name when you die and the accumulated value is over $50,000, a probate proceeding will ensue. If you own real property in your name when you die valued over $75,000, a probate proceeding will ensue. Probate is expensive, time consuming, and can be avoided.
Let’s take two examples to illustrate:
#1: Joe and Mary meet with an estate planning attorney and decide to create a Revocable Living Trust. The attorney requests that the couple provide asset information as to their investments, checking, savings, insurance, retirement, vehicles and real property. When Joe and Mary sign the original trust documents, they properly title each of these accounts into the name of the Trust. Joe passes away. Will there be a probate? No, all of the assets were titled in the name of the Trust.
#2: Joe and Mary create a Revocable Living Trust and re-title all of their existing assets into the Trust. Two years later, Joe opens up a new bank account valued at $60,000. This new account is titled only in Joe’s name; and Mary opens up a similar account in her name valued at $75,000. They each intended to have individual “mad money” accounts. Joe dies 6 months later. Is the result the same as scenario #1? No, here the account titled in Joe’s name will trigger a probate in Arizona. A court proceeding will be necessary to resolve the ownership of Joe’s bank account.
Could scenario #2 have been avoided? Yes, a probate could have been avoided if Joe had titled his bank account to the name of the Trust. The bank account in Mary’s name will also need to be re-titled to avoid a probate when she dies.
After the creation of the Revocable Living Trust, it is vital to continue titling all assets properly into the Trust. Is it time for a funding checkup on your assets? Please have one of our experienced estate planning attorneys review your existing plan by scheduling a free consultation today! Call 888.222.1328 to make your appointment.
About Morris Hall:
At Morris Hall, we have focused our legal practice on estate planning for over 40 years. Along with estate planning, our attorneys help clients and their families with matters of probate, trust administration, wills, power of attorneys, business planning, succession planning, legacy planning, charitable gifting and other important legal aspects. We also have divisions in financial, real estate and accounting to help you incorporate all of your planning together, ensuring that everything works perfectly for your needs and situation. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.