Does personal property go in a living trust?

Richard: Hi. Mine is in a similar vein as the previous call. I'm the successor trustee of my father’s living trust and he primarily wanted to avoid probate and I basically need to know some of the miscellaneous things in his home that are not under the trust; the coffee maker, the kitchen dishes. How must we get with the details for the things to avoid that must be put into trust?

Attorney Tom Olsen: Your dad has already passed away, right?

Richard: No. He's 103 and a half.

Attorney Tom Olsen: The things that go into trust are things that have a title associated with them like a piece of land has a title, a CD has a title, a bank account has a title. The living room couch does not have a title; I'm not concerned about it.

Richard: I'm with you. Thank you. Then the next important thing is because my dad has significant assets and they're in equities in addition to cash and banks that we could potentially cover creditor claims and all that sort of thing. I don’t know how big creditor’s claims could be claimed to be, in millions? Who knows? But basically, I wanted to know with myself and my sister as the only beneficiaries, I'm supposedly here to be able to have one half. She's able to have the assets, the growth, dividends and such from the other half. I want to know if it’s acceptable or reasonable or smart to liquidate when father passes except for those things that are – the equities that are going to become ex dividends hold on to.

Attorney Tom Olsen: Richard, typically whether you're doing a probate or trust administration, typically you pass on assets as you find them. For example if your dad had a piece of investment property, you would not typically liquidate that. You would simply retitle that piece of investment property into you and your sister’s name outside of trust and you guys make a decision whether you keep it, rent it, sell it, buy each other out.

The same thing would be true if your dad has a hundred shares of AT&T stock and typically you’d put 50 shares in your sister’s name, 50 shares into your name, and then you decide what you want to do with it from there.

Richard: Okay, and that’s fair enough. I think that makes great sense and I’ll follow that plan. Is there a waiting period before that must be done?

Attorney Tom Olsen: There's no waiting period, Richard, but again part of your job description is to make sure that your dad’s creditors get paid, doctors, hospitals, credit cards, final income tax return. You would want to just divvy out all the money on day two until you know that creditors have been paid.

Richard: A major portion would be held until some clearing of creditor’s claims. How much money months are we talking before the creditors are expected to respond to newspaper advertising?

Attorney Tom Olsen: When you do a probate, creditors are going to have three months in which to file a claim in the probate estate. When you have a living trust where there's no probate, creditors can come forward for up to two years from your dad’s date of death. What you may want to do is hold on to some of that money for at least a period of two years in case any creditors pop up.