A revocable living trust does not avoid probate just because you sign it. The trust must actually hold your assets. Until you place property in the trust or change the right beneficiary designations, some assets may still pass through the Ohio probate process.
Funding means changing ownership or beneficiary instructions
Funding a trust usually means changing how you own an asset. In some cases, that means moving title into the trust. In others, it means checking beneficiary designations to make sure they still fit the rest of the plan.
The basic steps in funding a revocable trust can help explain why signing the trust is only the beginning.
Real estate, accounts and business interests each require a different step
Real estate usually requires a new deed, and in Ohio you must also record that deed in the county where the property is located. Banks and brokerage firms often require account retitling before the trust can hold those assets. Life insurance may call for a beneficiary review instead of a title change.
Common assets to review may include:
- Bank and brokerage accounts
- Homes and other real estate
- Life insurance policies
- Valuable personal property
- Business ownership interests
- Retirement accounts, which often require beneficiary review rather than retitling
Retirement accounts need special attention because moving them into a trust during your lifetime can create tax problems. Business interests may also require separate assignments, stock certificate updates or agreement review.
New assets may also need trust funding later
Trust funding is not a one-time task. If you buy a new home, open a new account or acquire a business interest after creating the trust, that asset may need its own transfer step if you want the trust to control it.
The same problem often appears when wills and trusts are reviewed together and your asset titles no longer match the estate plan. A lawyer can compare the trust document to the way you currently hold your property and identify what still sits outside the trust.
