Revocable Trusts – Remember to Pack the Suitcase

When a loved one creates a revocable trust during his or her lifetime, surviving family members may question why probate may still be necessary when that loved one passes away. The best way to answer that question is through an analogy, “they forgot to pack the suitcase”.

To better understand a revocable trust and its relationship to probate, think of a revocable trust as a suitcase, and the destination for which the suitcase is being packed is called “avoid probate”. Following this analogy, in preparing for a cruise, a suitcase is packed with all the items we need once we reach our intended destination. We may write a list of all the items we need to pack. Once we arrive at our destination and unpack the suitcase, none of the items we failed to pack actually reach the destination. If we fail to pack anything at all, then we arrive at our destination with an empty suitcase.

Viewing a revocable trust as a suitcase, with the intended destination being “avoid probate”, then an inventory of all the items we intend to reach the intended destination should be made. If we want our bank accounts to make it to avoid probate, they need to be packed in our suitcase. The same goes for brokerage accounts, real estate, and any other items of property we want to make certain arrive at the intended destination of avoid probate. If we buy a new outfit, or replace our old sunglasses with new ones, intending to take them on our cruise, but forget to pack them in the suitcase, they are left behind and never make it to the destination. Similarly, changes in bank or investment accounts, or new acquisitions of real estate ownership, may occur after we first pack our revocable trust suitcase. If those new items of property never get packed in the revocable trust suitcase, they get left behind and never make it to the intended destination of avoid probate.

Only items of property which are actually “packed” in the revocable trust suitcase reach the destination of avoid probate. Certain items of property, such as real estate, bank accounts, stock, and motor vehicles, require separate additional acts to transfer title before they become part of a revocable trust. “Packing” those items “in the suitcase” requires taking those extra steps of conveyance. If we transfer nothing into the revocable trust, then an empty suitcase is all that arrives at avoid probate. And just as placing our written list of items we need to pack for our cruise into the suitcase does not equate to actually packing the listed items, simply designating property on a Schedule “A” is ineffective to transfer title into a revocable trust, particularly not any asset which requires a specific act or document to accomplish the transfer of ownership.

If you have questions concerning the use of a revocable trust, need assistance with transferring certain items of property into an existing trust, or want an existing trust reviewed to make certain it was set up correctly, at Bob Bible Law, we have the knowledge and over 35 years experience to help you navigate revocable trusts and your other estate plan objectives, and to assist with making sure the suitcase is properly packed.

– Robert W. Bible, Jr., Attorney at Law

For more information, contact Robert W. Bible, Jr., Attorney At Law at 727/538-7739 (office), 727/710-5166 (cell) or by email at: b.bible@BobBibleLaw.com; BobBibleLaw.com