It sounds like a scenario from a nightmare. Your children are ready to gain access to the assets in your trust after you die, only to discover that the trust is empty. That means the assets you intended to pass on to your children without a problem will instead go through probate. To avoid having this nightmare occur, Illinois residents should be aware of the steps they must take when they form their trusts.
Forbes Magazine explains the problem in a nutshell. Some people may think their work is finished when they secure their trust agreement. They put their documents away, confident that there is nothing more to be accomplished. However, all they have done is set up the trust. They have not filled it with any assets. The trust does not legally own any assets until the assets are legally signed over to it.
Once you have created the trust, your next steps are to transfer the legal titles of the assets from your ownership into the ownership of the trust. A vehicle that you want placed in the trust must have the title registered a second time so that the trust owns the automobile. Any financial account you want placed in your trust will require the proper paperwork to transfer ownership. Similar steps will be needed for real estate transfers to your trust.
Unfortunately, many people neglect to take these steps, which means all they have are unfunded trusts that will provide nothing for intended heirs. As a result, assets that should have gone into the trust will instead pass through probate. Your intended trustee will not be able to manage the assets. Also, if you should be incapacitated with an unfunded living trust, you will have to rely on your power of attorney to manage your affairs since your successor trustee has no control over your assets.
Basically, establishing a trust is only the first step. Anyone who is worried about avoiding probate should look into how assets can be successfully transferred into a trust. Since all sorts of assets can be placed into a trust, do not consider this article as offering legal advice. Its sole purpose is to educate readers on trust and probate administration topics.