If you do not deed/title the property in the name of the trust, it will not be trust property. That being said, I generally recommend against Connecticut residence using revocable trusts in the first place. If you're using it to hold out of state property, provide for a relative with special needs, or indicate the management of your finances if you become incapacitated, it's a valid tool, but for avoiding probate it is generally wasteful. Most of the time, your heirs will have to open a probate estate, the probate fee and estate taxes will be the same whether property is owned directly or in trust, and while a real estate sale can keep an estate open for longer, it doesn't necessarily have to take more than six months.
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Only assets titled to the trustee, or those assets on which the designated beneficiary is the trustee will avoid probate court administration. Many estate plans that have revocable trusts include a "pour over" Will that places your individually owned assets into the trust. However, those assets must first go through probate administration before they can be transferred into the trust. There are other ways to avoid probate besides a revocable trust. Assets owned jointly with rights of survivorship will not go through probate as long as there is a living joint owner. Assets on which you can designate a beneficiary, such as life insurance and IRA's, also avoid probate as long as there is a proper designated beneficiary form completed.
Trusts can be great tools for holding, protecting and distributing your assets. However, they are almost useless if they are not funded properly. In any event, the other attorneys are correct that probate will still be necessary to transfer any assets that you own in your name alone into the trust (assuming there is a 'pour-over' will).
But having said that, if you are diligent in transferring as much property as you can into the trust during your lifetime, including changing beneficiary designations on IRAs and insurance policies, you may be able to at least simplify the probate process.
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As a first principle, most assets which you do not have titled in the name of your trust will have to be probated. Unless you have an appropriate plan, those probated assets might not go where you expect, that is, most trusts are paired with a will which directs any non-trust property be devised to the trust (through probate). Thus, to avoid probate, it is critical to have your assets titled in the trust.
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A Trust without any assets is of little benefit, however, its advisable to consult with an Estate Planning Attorney to guide you through a number of complex decisions to determine what tools (such as a Trust) that your Estate Plan should leverage to achieve your tax, financial or family objectives.
A Trust is one tool in an Estate Plan and for simplicity can be thought of as a private agreement between the Trust and its Beneficiaries on how the Trust’s Assets (contributed by the Donor) are to be managed and distributed. A “Living Trust” (a/k/a “Inter Vivos Trust”) can take Title to assets (i.e. real estate, personal property, stock, etc) while the Donor is alive, and if it’s a Revocable Trust that generally means the Donor in his/her lifetime can change or terminate the Trust. Another common Trust that is most often created within a person’s Last Will & Testament, and referred to as a Testamentary Trust, essentially lies dormant during the person’s lifetime and becomes effective only after the person (Donor) dies (i.e. it doesn’t have title to assets during the Donor’s lifetime). One drawback of a Testamentary Trust is that the Estate still needs t be probated in order for the assets to “pour over” from the Testator (person who died) to the Trust set up within the Last Will & Testament (i.e. to care for minor children until they reach age 25, etc.)
Some of the more common reasons people use Trusts is to reduce estate taxes, provide for minor children, provide for special needs child (and maintain his/her eligibility for means tested benefits), manage assets for a financially unsophisticated or incapable person, and transfer assets outside of probate and in private.
Also be aware that some of the benefits of using a Trust to protect your assets have specific look back periods that the assets must have been transferred from the Donor’s name to the Trust’s name, so delay in transferring the assets can be harmful to an overall Estate Plan if not executed property.
Good luck and a good Estate Attorney would be a worthwhile investment to make sure your plan is appropriate for your circumstances.
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The general answer to your question is, "it is essential to have your home, car, and other assets titled in the name of your trust to avoid probate on those assets that would otherwise be subject to probate".
However, a complete answer to your question is not that simple. The first issue is to examine is whether avoiding probate is truly you only goal. If you have other goals, such as protecting assets from creditors, planning for a long term illness, and estate tax planning, a revocable trust may or may not be the only or best tool to accomplish your goals.
I am generally a huge proponent of using revocable living trust as the foundation estate planning document, but even I would be certain to tell you that a revocable trust is not for everyone, and certainly will not meet 100% of every client's goals. If you have multiple goals, you may want to sit with an estate planning attorney to review those goals and see how or if your revocable trust meets your needs,
If avoiding probate is truly your only goal, the next question is "what do you own". The only assets that are subject to probate are those that are owned in our individual name, and do not have a pay on death or beneficiary designation. Assets held in joint tenancy with right of survivorship are not probated. Assets such as retirement accounts, savings bonds and those with Transfer on Death (TOD) designations are not probated.
While joint tenancy, beneficiary designations and TOD accounts can avoid probate, these forms of ownership come with their own problems. Holding property in joint tenancy with a spouse, or naming a spouse as the beneficiary of retirement and other accounts may eventually lead to significantly higher estate taxes. These forms of ownership do not protect assets from the claims of creditors while you are living, or from the creditors, estate taxes or divorcing spouses of your beneficiaries after your death.
Unique to Connecticut, regardless of whether an asset is subject to probate, and regardless of whether estate taxes are due, Connecticut estates pay a fee to the probate court. This fee is calculated based on the value of your assets at death.
Once again it is about your goals and what you own. A qualified estate planning attorney may help transfer the appropriate assets into your trust and, based on your priorities, help you establish a comprehensive plan to accomplish as many of your goals as possible.
I hope this helps.
Legal Disclaimer: The comment provided above is intended as general information and is NOT legal advice. You should consult an attorney for advice regarding your individual situation. If your question concerns Estate Planning, Business Planning, Asset Protection, Elder Law, Long Term Care Planning, or matters governed by the laws of Massachusetts or Connecticut, you may contact me for a consultation at email@example.com or 413-527-0517.
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