Irvine, CA Estate Planning Blog

If you’ve set up a Revocable Living Trust, congratulations!  You’re definitely on the right track. But…you’re only half way there. Many believe because they took the time to create a Trust, their estate will automatically avoid probate.  Unfortunately, this is a false sense of security.

The key to probate avoidance is proper asset ownership, including the full funding of your Revocable Living Trust.

What are Probate Assets?

What assets require probate?

• Accounts and real estate titled in your sole, individual name [without a payable on death (POD) or transfer on death (TOD) designation]
• Accounts and real estate you own as a tenant in common
• Contract assets naming your estate as beneficiary

What are Common Assets that are Often not Funded into a Trust?

The following assets automatically avoid probate after you die but most should be funded into your trust either by change of title or change of primary or contingent beneficiary: 

• Accounts and real estate owned as joint tenants with rights of survivorship
• Accounts and real estate owned as tenants by the entirety
• Life insurance
• Retirement accounts, including IRAs, 401(k)s, and annuities.

  • Annuities which designate a trust as a beneficiary must be paid out within 5 years of death

• Life estate property
• Payable on death (POD) and transfer on death (TOD) accounts and, in some states, transfer on death or beneficiary deeds

What’s the Next Step?

Ask a qualified estate planning attorney to confirm that your Revocable Living Trust is fully funded and that all assets are aligned with your estate planning.  Proper asset ownership is key to probate avoidance.