Generally, when people place assets into a revocable trust it is for the purpose of avoiding the expense and delay of probate. All your assets, everything you own in your name at the time of your death, will go through the probate process. So, the objective of a trust is to transfer ownership of as many assets as possible into the trust in order to remove them from the probate process. How do you decide which assets to transfer to the trust? What happens to assets not in trust? These are questions our trust lawyers can answer.
Which assets do you transfer?
As the person creating the trust, you decide which assets will be transferred and which will not. It is entirely up to you. Some individuals transfer everything they own into their trust. Others transfer nearly everything. It is not necessary to transfer every single asset. Those items that you choose to leave out can be handled with what is known as a “pour-over” will. So, how do you determine what to keep in and what to leave out?
Some of the most common assets that people transfer to their living trust include the following:
- Houses and other real estate
- Bank Accounts (other than checking accounts)
- Campers, boats and expensive or rare automobiles
- Expensive Jewelry, antiques and valuable furniture
- Stocks, bonds, mutual funds and other securities
- Small business interests
- Precious metals such as gold and silver
- Valuable collections, such as rare coins, stamps, and artwork
Generally speaking, the so-called “big ticket” items are typically placed into trust. Since not everything you own needs to be placed into the trust, what happens to those items that are left out? Our trust lawyers have the answer.
What happens to assets not in trust?
What happens to assets not titled in the trust at death depends on the nature and value of the property. Under Nevada law, if the only assets left out of the trust are personal property, and the value of the property, excluding the value of any motor vehicles, is $25,000 or less (or $100,000 or less of the beneficiary entitled to the property is a surviving spouse), the property can be transferred outside of probate by way of a simple affidavit procedure. If the assets left outside the trust include real property and/or personal property not exceeding $100,000, the property can be set aside for the beneficiaries outside of probate with a single petition to the probate court. If the value of the assets left outside of the trust exceed $100,000, a probate administration is necessary.
Ancillary probate may be required in situations where you own out-of-state property that is not titled in the name of your trust. Any assets that are owned in joint tenancy with right of survivorship or by the entirety with your spouse, you can lose your estate tax exemption, as well as run the risk of disinheriting your children. If a minor child or grandchild is a co-owner or tenant with you, and that property is not included in your trust, an adult will need to initiate court proceedings to gain control through a guardianship or conservatorship.