Revocable Trust Funding

A revocable trust does not avoid probate unless it is “funded.” “Funding” means naming the trust as owner or beneficiary so assets pass automatically to the trust upon death. Any asset not in the trust or passing automatically to the trust upon death will require probate. Describing assets that the trust holds is not sufficient.

It is necessary to issue a deed for real estate and change the records with an institution that holds an asset. Personal property, such as furniture, jewelry, and similar items without certif- icates of title are generally placed into the trust by a Bill of Sale, reserving a life estate to the Grantor.

Non-retirement bank accounts and brokerage accounts are transferred to the trust while the Grantor is alive by changing the name on the account to the name of the trust, or naming the trust as beneficiary, which banks call “pay- able on death” or “POD”and brokerages call “transfer on death” or “TOD”.

It is not possible to change the name on a retirement account (IRA, 401K, etc.) to a trust. However, the Grantor can name a trust as beneficiary. Generally, a married person would name the spouse as the primary beneficiary and name the trust as alternate or contingent beneficiary.

Sometimes people name their children as beneficiaries of accounts instead of naming their trust. This avoids probate as to that asset. However, if the trust provides that the share of a de-ceased beneficiary goes to the beneficiary’s children, the Grantor should name the trust as beneficiary so that wish is fulfilled if the child predeceases the Grantor. Naming individuals as beneficiaries normally results in the asset passing only to the surviving beneficiaries named on the account.

If a revocable trust is not funded with all assets, the Grantor has wasted time and money in creating it because it does not accomplish its purpose.

Attorney Michael A. Pyle, of Pyle, Dellinger & Duz, PLLC, 1655 North Clyde Morris Blvd., Suite 1, Daytona Beach, Florida, 32117 Telephone: 386.615.9007. E-mail: mikep@pylelegal.com or website: www. pylelegal.com