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The Montana Estate Lawyer

Thursday, October 10, 2019

Why Living Trust Plans Don't Work

Many people think of estate planning as a one-time event. They may put a significant amount of time, money and effort into creating a great living trust-based plan, but then they file it away and forget about it. What is going to happen to these plans?  They won’t work when these people and their family need them to.

The most common reason trust-based plans don’t work is that the trust doesn’t own all of the assets.  So, even though a properly funded trust will allow the family to avoid probate, that won’t happen for these people. The families will need to file a probate action to transfer the assets that weren’t properly titled in the name of the trust. The result?  Lack of privacy and control, increased expenses and delays. Increased chance of family fights.

This may happen because the clients or their attorneys didn’t initially work to get the assets titled into the name of their trust.  It can be a lot of work and if either the clients or their attorneys don’t keep their eye on the ball the assets won’t be aligned with the plan, and they will be set up for failure.

Even if the clients do initially get their assets properly titled, if they forget about their trust and don’t periodically review it and their asset ownership, when they pass away inevitably some of their assets won’t be properly titled.  So, again, we’re talking probate.

In our office we have team members whose only job is to help our clients get – and keep - their assets properly titled. That’s one of the features of our client care program, the Peace of Mind Protector.  Plan members review their planning and asset ownership annually, and our team members help them align their assets with their trust plans. The result?  No probate! Their plans work the way the people wanted them to.

 

Keith



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