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Ins and outs of trusts and the need
for probate
Question:
If I have a trust in my will, does it have to go through probate?
Answer:
A trust can be used to avoid probate if it is a separate document from
the will and if it is funded by all of the assets of the person writing
the trust. If a trust is written as part of the will - that is, if
the will itself contains all of the trust provisions - then the whole
estate is subject to probate.
Question:
I have a trust that is a separate document from my will. My will
leaves my estate to the trustee of this separate trust. Is probate
necessary?
Answer:
Maybe yes, maybe no. If you have not transferred your assets to
the trust then probate is still required. Your will leaves your
assets to the trust, but since you own them, they are in your probate
estate and pass through probate to the trust. However, if you have
transferred the legal title to all of your assets to the trust, then at
your death the trust owns everything, your personally have no probate
estate and so no probate is necessary.
Question:
I have made a list of all my assets and attached it to my trust or
listed them in the Schedule A attached to my trust. Will probate
be avoided?
Answer:
Probate will not be avoided merely by listing your assets. Legal
title must be transferred. For securities, this means that the
stock certificate must name the trust as the owner on its face. Or
if your securities are kept in a brokerage account, the account must be
in the name of the trust. The designation must have the word trust
in it, for example, "John Doe, Trustee of the John Doe Living
Revocable Trust. Dated April 3.1994." For real estate, the
deed should read the same way and be recorded in the appropriate
Registry of Deeds. The same designation should be made for bank
accounts, CDs, etc.
Question:
I've transferred all my assets into the name of my trust. Do I
still need a will?
Answer:
Yes. You may have forgotten something, or you may acquire a new
asset in your own name. If your estate, through the personal
representative named in your will, recovers a large amount of money,
then your will is needed to transfer the assets to your trust. The
will is commonly called a "pour-over" will because it has a
catch-all paragraph, which says that all of the rest of your estate
(including things you may have forgotten or didn't know you owned) is
"poured-over" into your trust. Signing your will and
trust is not the end of your estate planning. You must also know
what is going into your trust and decide whether you want to fund the
trust during your lifetime so that you avoid probate. You may also
decide that you will rely on the "pour-over" clause in you
will and allow your estate to be subject to the supervision of the
Probate Court. Either decision is yours to make, but you should
make it knowingly, and not by default.
- Attorney Alan S. Novick, Scripps Howard News Service
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