problems with unfunded revocable trusts

10
PROBLEMS WITH UNFUNDED REVOCABLE LIVING TRUSTS HOWARD H. COLLENS GALLOWAY AND COLLENS, PLLC

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Page 1: Problems with Unfunded Revocable Trusts

PROBLEMS WITH UNFUNDED REVOCABLE LIVING TRUSTS

HOWARD H. COLLENSGALLOWAY AND COLLENS, PLLC

Page 2: Problems with Unfunded Revocable Trusts

A Revocable Living Trust is intended to:

Hold assets during a person’s life

Provide for administration upon incapacity

Provide for administration upon death

Avoid probate

Page 3: Problems with Unfunded Revocable Trusts

A Trust Is Like A Bucket…

It only controls those assets that are titled into it

Certain images and/or photos on this page are the copyrighted property of 123RF Limited, its Contributors or Licensed Partners and are being used with permission under license. These images and/or photos may not be copied or downloaded without permission from 123RF Limited.

Page 4: Problems with Unfunded Revocable Trusts

What Problems Arise If Certain Assets Don’t Make It Into The Bucket?

Certain images and/or photos on this page are the copyrighted property of 123RF Limited, its Contributors or Licensed Partners and are being used with permission under license. These images and/or photos may not be copied or downloaded without permission from 123RF Limited.

Page 5: Problems with Unfunded Revocable Trusts

Problems During Life

Upon incapacity of Settlor, may require establishment of Conservatorship through Probate Court

Asset is not controlled by Trustee

Problems with Power of Attorney Agent who is different than Trustee

Page 6: Problems with Unfunded Revocable Trusts

Common Problems Post Death

Blank Beneficiary

Lost Deed in the Drawer

Unintended Joint Ownerships

Certain images and/or photos on this page are the copyrighted property of 123RF Limited, its Contributors or Licensed Partners and are being used with permission under license. These images and/or photos may not be copied or downloaded without permission from 123RF Limited.

Page 7: Problems with Unfunded Revocable Trusts

Consequences

Probate Court involvement

Unintended control of the estate

Unintended distribution patterns

Longer administration

Shorter administrationCertain images and/or photos on this page are the copyrighted property of 123RF Limited, its Contributors or Licensed Partners and are being used with permission under license. These images and/or photos may not be copied or downloaded without permission from 123RF Limited.

Page 8: Problems with Unfunded Revocable Trusts

A Caveat

Not ALL assets should go into the Trust Pre-tax investments like IRAs and

401ks Special Circumstances Intended Joint Ownerships Ladybird Deeds

Certain images and/or photos on this page are the copyrighted property of 123RF Limited, its Contributors or Licensed Partners and are being used with permission under license. These images and/or photos may not be copied or downloaded without permission from 123RF Limited.

Page 9: Problems with Unfunded Revocable Trusts

Optimal Funding Times

At the Creation of the Trust Advantage of getting it done Possible loss of protection

Annual review Coordination by Attorney, CPA, Financial

Advisor At Death

Beneficiary DesignationCertain images and/or photos on this page are the copyrighted property of 123RF Limited, its Contributors or Licensed Partners and are being used

with permission under license. These images and/or photos may not be copied or downloaded without permission from 123RF Limited.

Page 10: Problems with Unfunded Revocable Trusts

Howard H. CollensGalloway and Collens, PLLC

26075 Woodward Ave, Suite 200Huntington Woods, Michigan 48070

248.545.2500GallowayCollens.com

[email protected]: @howardcollens @probatelawmi

@realestatelawmi