- Probate - If any of your property isn't titled in the name of your trust when you die, it will need to to be probated after you die.
- Ancillary Probate - If you own real estate in more than one state and you've failed to retitle all of it into your trust before you die, then your loved ones may be faced with probate in your home state and ancillary probate in each additional state where you own property.
- Increase in Estate Taxes - If all of your accounts are owned as joint tenants with right of survivorship or as tenants by the entirety with your spouse instead of in the name of your trust when you die, then the AB Trusts established under your trust can't be funded and you'll therefore be wasting your entire estate tax exemption.
- Disinheriting Beneficiaries - If any of your assets are owned as joint tenants with right of survivorship with one of your children instead of in the name of your trust when you die, then you'll be disinheriting all of your other children.
- Guardianship or Conservatorship for Minor Beneficiaries - If you own any assets as joint tenants with right of survivorship with a minor child or grandchild instead of in the name of your trust when you die, then an adult will have to go to court in order to gain control of the account by establishing a guardianship or conservatorship for the benefit of the minor.
- Income Tax Problems - If you fail to update the beneficiary designations for your life insurance and retirement accounts to coincide with the terms of your trust before you die, then your beneficiaries won't be able to take advantage of important estate and income tax strategies or asset protection.
- Guardianship or Conservatorship for You - If you become mentally incapacitated and any of your assets are owned in your individual name or as a tenant in common outside of your trust, then your loved ones will be faced with establishing a court-supervised guardianship or conservatorship in order to be able to manage you and your assets.
The bottom line is that if you overlook the importance of funding your Revocable Living Trust, then your estate plan won't work as you or your family had anticipated and your trust will only be worth the paper it's written on.How to Open a Probate Estate