A flaw in a revocable trust is the chance an asset will be left out
The information in this column is intended to provide a general understanding of the law, not as legal advice. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.
Q: My parents set up a revocable trust to avoid probate. My father died, and all of their assets are in the trust except a $49,000 account. The bank says the account can’t be accessed until his will is probated. Is there another way to transfer this $49,000 into the trust?
A: One of the major drawbacks to a revocable trust is the possibility that an asset will get left out of the trust. When that happens, probate is still necessary, even though avoidance of probate was the primary goal of setting up the revocable trust.
This happens often, and the result is almost always that the will must be probated.
In your case, it is possible that a small estate affidavit can be used as a way to simplify the probate process. An agreement would be signed whereby all of the relevant parties would agree not to probate your father’s will, and that would mean he effectively died without a will. In that case, your mother would be allowed to use the simpler small estate affidavit.
The problem, though, is that your mother will very likely need to hire a lawyer to guide her through the process. Hiring a lawyer means there will still be legal fees your mother would have to pay if she wants to gain access to the money.
Q: I recently retired, and I need some planning. Please direct me to a website where I can find a deed of trust form so my heirs won’t need probate, plus a form for directives. These forms can be legal if notarized so I do not need to pay a lawyer.
A: Hiring a lawyer might be a good idea, even though it will cost you some money.
If you search the internet for a deed of trust with the goal of avoiding probate, you won’t get very far. A deed of trust is a mortgage instrument used in a real estate transaction. What you may be looking for is a Revocable Trust. But this is a complicated form that you may not want to attempt to draft yourself.
Yes, you might be able to find a form online, but filling in the blanks, setting up a plan of distribution and modifying the form so that it works for your particular circumstances may not be easy. Plus, you may not even need a revocable trust.
If you want to find a directive online, that’s easy. Just search “Texas directive to physicians form,” and you’ll quickly find a form you can print, sign and have notarized or witnessed.
You might also be looking for a transfer on death deed, and you can find that form online using a similar word search.
Keep in mind, there are a handful of other forms you might want to sign in addition to the forms you mentioned. A lawyer can advise you properly.
Ronald Lipman, of Houston law firm Lipman & Associates, is board certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to stateyourcase@ lipmanpc.com