David Howard Goldberg, P.L.

Assets not funded to trusts lead to complications for heirs

Establishing a revocable living trust is a wise move for many in Florida who are planning their estates. Revocable trusts protect assets from taxes and probate and allow heirs to benefit from the assets according to the trustee's directives. However, establishing a trust is only the first step. Assets are not covered by the terms of the trust if the trustee does not fund them to the trust.

It is not unusual for someone to gain and lose assets as time passes. A trustee may purchase a new home, sell a business or trade valuable art or jewelry. Failing to title any new property to the trust after these changes may leave the assets open to probate. This may make things especially complicated for heirs. If, for example, the trustee purchases additional real estate in another state without funding the property to the trust, the heirs will not only have to deal with a prolonged probate, but likely an ancillary probate for the out-of-state property.

Leaving assets out of the trust may leave the grieving family with many complications, especially if children who are not yet adults are left behind. To protect the inheritance of minors, an adult will have to petition for conservatorship over the inheritance. Additionally, if the trustee should become incapacitated, the successor trustee will have no authority to manage any assets that are not funded to the trust. Again, this will place the ailing person's loved ones in the position of having to seek conservatorship in court.

Frequently revisiting one's estate plan, including any revocable living trusts, is a wise move. An outdated estate plan or unfunded trust may be worthless when it matters most. Those in Florida seeking advice about updating their estate plans can find guidance with a skilled attorney.

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