Estate planning is a meticulous process, one that many people believe concludes once they've signed all the necessary documents. While it's true that signing is a crucial step, there's more to consider, especially when it comes to financial assets.

The Three Components of Your Estate

There are three primary components to an estate: real estate, finances, and personal property. Most people, upon meeting with their attorney, usually address the real property and personal assets by ensuring they're titled into their trust. This, however, leaves the financial aspects still to be explored.

Why Your Bank Account Isn’t Automatically in Trust

Even if your trust document references an intent to hold bank accounts in trust, it doesn't mean the bank account is already in the trust. For instance, even listing account numbers doesn’t automatically transition them into trust. It's a common misconception that needs to be rectified.

Read more: How to Fund a Trust | Transferring Bank Accounts to Your Trust

The Role of an Estate Planning Attorney

As estate planning attorneys, their task is to help clients design their estates efficiently to save time, reduce potential headaches, and mitigate any unforeseen fees. However, the extent to which they can assist is limited. For instance, while they can guide you through each financial asset and develop strategies, they cannot directly retitle bank accounts into the name of your trust. Such tasks fall on the client or their financial adviser.

Avoiding the Perils of Probate

One of the main reasons to create a trust is to bypass probate court, known for its lengthy delays and potential expenses. If a significant portion of financial assets remains solely in your name and not in the trust, you might end up in probate court anyway, defeating the trust's primary purpose.

Real-Life Examples

The Red Estate: A case where the failure to retitle financial assets led to unnecessary probate court involvement, costing the family an additional $10,000 in attorney and court fees.

The RED Estate

Real Property (x2): $1,500,000
Corporation: $234,000
Bank Accounts (x5): $200,000
Life Insurance: $58,000
Misc. Assets: $100,000

TOTAL ESTATE SIZE: $2,092,000

The RED Probate Estate

Bank Accounts (x5): $200,000
Life Insurance: $58,000

TOTAL FEES: $9,700

The Blue Estate: Another instance where scattered financial assets that were not placed in trust necessitated probate, costing the family around $13,000 in fees.

The BLUE Estate

Real Property: $700,000
Financial Assets: $450,000

TOTAL ESTATE SIZE: $1,150,000

The BLUE Probate Estate

Financial Assets: $450,000

TOTAL FEES: $13,000

Safeguard You Assets

Errors in transferring assets into trusts can be lucrative for estate planning attorneys to rectify, but they can be distressing and expensive for families. By ensuring that all assets, including financial ones, are correctly titled into your trust, you can save your estate from undue fees and your family from unnecessary stress.

Read more: The Hidden Pitfalls of Adding Children to Property Titles