Here’s the hypothetical. A woman meets with me about the recent death of her brother. The brother had a revocable trust. But when we review all of the brother’s assets at the time of his death, there’s a bank account with significant money in it.
But, the brother never filled out the payment on death designation (POD) form for the account stating that the bank account would go to his trust after his death.
This means that the bank account is not a trust asset and my new client must open up a probate administration in order to transfer the bank account into the trust.
When I explain the situation to my client, I get the question, “But what’s the point of my brother having a trust if we have to open a probate anyway?!” This question is asked with frustration and often times some anger.
The frustration and anger is understandable. Now, the family must deal with the cost and work of a trust administration for the assets that were properly funded into the trust AND a probate administration for the asset that was not funded into the trust.
The bottom line is, a trust isn’t doing a key component of its job if it is not properly funded. In the above hypothetical, all the brother had to do was fill out a POD for his personal bank account, and no probate would have been needed.
Often times, people create their estate plan but fail to follow up when their assets and life circumstances change. My recommendation to my clients is to visit their estate plan at least once a year. This gives you the opportunity to make sure that the person you named as your trustee is still the person you want.
Or you might realize that the new checking account you opened that year needs the POD form filled out so it flows into your trust at death. Or you may want to make sure that the person you listed as your health care surrogate is still willing and able to serve. Write a list of all the things, if any, that need to be updated in your estate plan, then make an appointment with your estate planning attorney to make those changes.
I encourage you to look over your estate plan and think about what might need to be updated, no matter what time of year it is. If you don’t already have an estate planning attorney, we’d be happy to meet with you to review your estate plan and help you make any changes that are needed.
Our lives are dynamic and changing constantly. Your estate plan should be updated accordingly in order to meet your changing circumstances and needs.
Julia C. McKillop
Julia drafts estate plans, wills, trust agreements, and end-of-life advance directives for individuals and families across Florida. She helps people of all ages and every situation by designing personalized estate plans so that if crisis hits, her clients' wishes and needs are met.
Julia is a graduate of the University of Florida Levin College of Law and is a senior partner at McKillop Law Firm. Prior to becoming a lawyer, Julia lived in Chile teaching English as a second language. Upon returning to the States, she worked in Miami as a paralegal, ultimately deciding to go to law school in order to put her life experiences to work as an advocate and counselor. Julia, Dan and their two young sons recently relocated to Jacksonville to join our Jacksonville team.