Bob and Carol had a Living Trust, but neglected to retitle their assets as instructed by their attorney. The attorney even deeded their home to their trust, but they later sold the home and purchased another home in joint tenancy and not in the name of the trust. Bob died a few years ago, and on Carol's death, all of the assets were subject to probate and were part of her taxable estate. This defeated many of the reasons for having a Living Trust Estate Plan.
By not titling their assets in the name of their trust, they totally defeated their planning goals of avoiding probate and reducing estate taxes.
Moral: If you have a living trust, be sure to fund it with your assets by changing record title or beneficiary designations as instructed by your attorney. In our office we fully fund all of our trusts so you don't have to worry about it. We also conduct periodic plan reviews to determine that everything is working correctly and the assets are all properly titled.
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