Will your trust avoid probate? It depends

After setting up a revocable trust, it is important to remember that only the assets titled in the trust or that have the trust as the beneficiary will avoid probate and be administered directly under the trust. While we also prepare "pour-over" wills when doing trusts to direct any probate assets into the trust, there are additional steps you can get the most out of your trust.

As stated above, the key to avoiding probate is proper asset ownership, including through funding your revocable 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

What assets avoid probate?

  • Accounts and real estate owned as joint tenants with rights of survivorship
  • Life insurance with named beneficiaries
  • Retirement accounts, including IRAs, 401(k)s, and annuities with named beneficiaries
  • Life estate property
  • Payable on death (POD) and transfer on death (TOD) accounts and, in Minnesota and some other states, transfer on death or beneficiary deeds

What’s the Next Step?

Review your trust funding instructions for a refresher on how to title assets or name your trust as the beneficiary. It is also important to review your beneficiary designations annually. You can also work with a qualified estate planning attorney to confirm that your revocable trust is fully funded and that all assets are aligned with your estate planning. Overall, proper asset ownership is key to probate avoidance.

If you'd like to review your trust with one our attorneys, you can call our office at (507) 288-5567 to schedule an appointment or Book Online.

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Categories: Estate Planning