Carol and Jim had been married for 25 years – their children were grown. Jim took the steps to have an estate plan made – he had trusts made for himself and his wife with pour-over wills. Carol went in to sign the documents though she really didn’t pay any attention to what they were for – she trusted her husband to do the right thing.
Jim was only 52 when he unexpectedly died from a massive coronary. Carol came to me to see if she needed to do anything – after all, Jim had set up these trusts that should take care of everything.
What he had failed to do was to fund the trusts. Their real property had not been transferred into the trust. None of their bank accounts, brokerage accounts, or other assets had been transferred.
Since a number of assets were in Jim’s name alone, it was necessary to commence a Probate proceeding in order to get the assets into his trust. This cost Carol not only the filing and attorney fees but the inventory fees as well.
Additionally, real property had to be transferred requiring that deeds be prepared and recorded.
How could this have been avoided? At the time the trusts were prepared, all real property should have been transferred into the trusts. Additionally, all bank accounts, brokerage accounts and other assets should have been transferred as well. This follow up is critical to having a revocable trust work smoothly upon the death or disability of the grantor.