Living trusts are popular estate planning tools here in Georgia, and for good reason. They can help avoid probate, maintain privacy, and provide for smooth asset management. But what happens if you forget to put an asset into your trust? At Smith Barid, LLC, we often get this question from concerned clients. Let’s break it down.
The Basics of Living Trusts
First, a quick refresher. A living trust is a legal arrangement where you transfer ownership of your assets to a trust. You can manage these assets as the trustee during your lifetime, and specify how they should be distributed after your death. But for the trust to work as intended, you need to transfer your assets into it – a process called “funding” the trust.
When Assets Are Left Out
If an asset is left out of your living trust, it can’t be distributed according to the trust’s terms. Instead, here’s what might happen:
1. It Goes Through Probate
One of the main benefits of a living trust is avoiding probate. But assets outside the trust may have to go through probate to be distributed. This means:
For Savannah residents, this could mean a trip to the Chatham County Probate Court for your heirs.
2. It’s Distributed According to Your Will
If you have a will, assets not in your trust will be distributed according to the will’s instructions. This is where a “pour-over will” can be helpful. This type of will essentially says, “anything I own that isn’t in my trust should be poured into it upon my death.”
3. It Goes to Your Heirs According to State Law
If you don’t have a will, assets outside your trust will be distributed according to Georgia’s intestacy laws. This might not align with your wishes. For example, you might want everything to go to your spouse, but under Georgia law, your children might be entitled to a share.
Common Assets Often Left Out of Trusts
In our practice here in Savannah, we often see certain assets accidentally left out of trusts:
How to Avoid This Issue
The Savannah Perspective
In Savannah, we often deal with unique assets that require special attention. Maybe you’ve inherited a historic home downtown, or you have a share in a family business on River Street. These high-value or complex assets are particularly important to properly transfer into your trust.
What If I’ve Already Missed Something?
Don’t panic! If you realize you’ve left something out of your trust, it’s usually not too late to fix it. The process of transferring an asset into an existing trust is called a “trust transfer deed” for real estate, or simply retitling for other assets.
At Smith Barid, LLC, we can help you review your trust, identify any assets that have been left out, and take the necessary steps to bring your estate plan up to date. We understand the nuances of Georgia law and the unique needs of Savannah residents when it comes to estate planning.
Concerned about assets that might have been left out of your living trust? Or thinking about setting up a trust and want to make sure you do it right? Give us a call at 912-352-3999 or click here to schedule an initial discovery meeting. Let’s work together to ensure your estate plan is comprehensive, up-to-date, and truly reflects your wishes.
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