By Libby Banks, the Law Office of Libby Banks, PLLC

Most of our clients who have created a revocable living trust with us do so to avoid probate. Probate is the court proceeding filed in order to appoint an executor — called a personal representative in Arizona — to be able to access a deceased person’s bank accounts and assets and settle their estate. It’s expensive, time consuming for your heirs, and a public proceeding — anyone can go look at what’s been filed in the probate court. Not only does it expose your affairs to anyone who cares to look, it allows the many predators who are actively looking at these files to contact your personal representative. One client recently said they had numerous letters from people wanting to buy her deceased mother’s house, and that one real estate agent actually came knocking on the door when they didn’t respond to his calls!

The Trust is great for avoiding the hassles and expense of probate. But did you know you could end up with a probate even if you have a trust?

The key to avoiding probate with a trust is to assure that your assets are properly titled to the trust. We call this “funding the trust.” The few assets that cannot or should not go to the trust must also have proper beneficiaries named so we avoid probating them.
When we create a trust for you, we also prepare a Will. In our office, we call this a Pour-Over Will. It is designed to catch assets that are not in the trust or have no named (and living) beneficiary and “pour” them into the trust. The problem is, that pour over is not automatic. This Will is subject to the probate rules.

Here are some of the situations where we have to file a probate even though the deceased had a trust:
• He bought a new house and didn’t title it in the trust.
• She refinanced the mortgage and the mortgage company took it out of the trust in the process and didn’t get it back into the trust after closing on the refinance.
• An IRA (which must stay in the individual’s name) had only her spouse listed as a beneficiary — and the spouse passed before her.
• One of the spouses had an account in only his name that never was retitled to the trust, and again, had no beneficiary.
• The deceased bought a rental property, titled it in an LLC, but the LLC is solely owned by the deceased.

Many of my articles have focused on making sure your trust stays updated with laws, changes in your beneficiaries’ lives and changes to your trustees and agents named to handle your affairs. Equally important is checking your various holdings to be sure they are funded to your trust or have beneficiaries.

For our clients, we have recently started a Legacy Care Program membership so that we work regularly with our clients to ensure that their trusts are fully funded and review to see if changes are needed. If you are a client and interested in the program, check our website at https://libbybanks.com/legacy-care-program/

If you are interested in working with an attorney who will offer you ongoing care and support for you and your family or other beneficiaries, give us a call at 602-375-6752.