How The Failure to Retitle Assets into Your Revocable Living Trust Can Hamper Your Estate Plan
A revocable living trust is a useful estate planning tool that can help individuals manage their assets during their lifetime and after their death. However, simply creating a trust is not enough to ensure that your assets are protected and managed according to your wishes. One crucial step in the trust creation process is retitling assets into the trust’s name.
What is retitling of assets?
Retitling of assets means changing the ownership of an asset from the individual’s name to the trust’s name. This process is necessary for the trust to effectively hold and manage the asset. Examples of assets that need to be retitled include real estate, bank accounts, investments, and personal property.
Why is it important to retitle assets into a trust?
Retitling assets into a trust is important for several reasons:
- To avoid probate: Probate is the court-supervised process of distributing a person’s assets after death. If assets are not retitled into the trust’s name, they may be subject to probate, which can be a time-consuming and expensive process.
- To ensure asset protection: Retitling assets into a trust can help protect them from creditors and lawsuits.
- To ensure effective asset management: If assets are not retitled into the trust’s name, the trust may not have the authority to manage them, which can lead to confusion and difficulties in administering the trust.
Why do some people fail to retitle assets into their trust?
There are several reasons why people fail to retitle assets into their trust, including:
- Lack of knowledge: Some individuals may not fully understand the importance of retitling assets and the consequences of failing to do so.
- Procrastination: The retitling process can be time-consuming and may require visiting multiple institutions, which can lead to procrastination.
- Incomplete trust creation process: In some cases, individuals may create a trust but fail to complete the retitling process, which can result in assets being left out of the trust.
How to retitle assets into a trust?
Retitling assets into a trust is a straightforward process that typically involves contacting the institution holding the asset and requesting a change of ownership. The institution may require the submission of a retitling form and the trust document. It is advisable to consult with an attorney to ensure that the retitling process is properly completed.
Retitling assets into a revocable living trust is a crucial step in the trust creation process. Failure to retitle assets can lead to probate, asset protection issues, and difficulties in managing assets. To ensure that your assets are effectively protected and managed, it is important to retitle assets into your trust as soon as possible.