Living trusts sometimes require probate

Living trusts sometimes require probate when the trust is unfunded. For a living trust to avoid probate, your assets must be owned by your trust.

Caller: Hi. I'm calling about probate. Unfortunately, we just have a family member pass away and now it looks like there was a trust created but nothing moved into the trust. Looks like we have no choice but to go through probate.

Attorney Tom Olsen: Yes, it's a common problem. A lot of people out they have living trust and think, "I paid all this money for a living trust therefore I'm going to avoid probate in the end."

In reality, they're not. Why? Because to avoid probate with their trust, it requires two things. Number one, that you have a trust. Number two, that you trust-owned your assets. Secondly, this whole idea of people have living trust that are unfunded is very common, it's going through probate. Secondly, when you have a living trust, you have a special type of a will called a pour-over will. It says those assets that go through probate get poured over into my trust. Yes, that trust would then open up a bank account and move all the moneys into it. If the trust sold some real estate, the proceeds from that real estate will be put into that trust account.

Now, secondly, usually, when you have estates, whether they're probate or trust administrations, you pass only assets as you find them. If there are three kids and there are four pieces of property, you would simply take those four pieces of property and retitle them into the name of the three kids.