What Mistakes Commonly Cause Estates to Go Through Probate Anyway?

What Mistakes Commonly Cause Estates to Go Through Probate Anyway?

Although many people plan ahead for their future through estate planning, there are various common mistakes that will send an estate to probate anyway. These mistakes can include:

• Relying on a will alone to keep property out of probate
• Creating a trust but never funding it by transferring property and accounts into it
• Leaving financial accounts without valid beneficiary designations
• Owning property in a way that does not allow it to transfer automatically after death.

Fortunately, many of these mistakes are avoidable. If you have any questions about how to protect your estate from going to probate, the team at TrustMasters is ready to take your call.

Does Having a Will Keep Property Out of Probate?

This is one of the most widespread misconceptions in estate planning, and it costs families time and money. A will does not keep your estate out of probate. A will is a set of instructions for the court. It tells the court what you want done with your property, but the court still has to supervise the process of carrying those instructions out.

Probate is the legal process through which a court oversees the distribution of your estate. Even with a detailed, well-written will in place, your estate may still go through probate if no other planning tools are set up to handle the transfer of assets outside of court.

A revocable living trust, by contrast, allows your assets to transfer directly to your beneficiaries after your passing without court involvement. A will simply cannot do that on its own.

What Happens When You Create a Trust but Never Transfer Assets Into It?

This is the mistake that catches so many people off guard. They go through the work of setting up a trust and assume the hard part is done. But an unfunded trust, meaning a trust that holds no property, offers no protection. Funding your trust means retitling your assets so the trust legally owns them. That includes:

• Real estate (your home, rental properties, land)
• Bank and investment accounts
• Business interests
• Other significant assets

If those assets remain in your name alone when you pass away, they do not flow through the trust. They go through probate. Fortunately, a trusted team can walk you through the process and help you make sure your trusts have the proper funding.

Why Do Financial Accounts Without Beneficiary Designations Cause Probate?

Certain financial accounts, like life insurance policies, IRAs, and 401(k)s, can transfer to a named beneficiary without going through probate at all. That is a significant advantage. But only if the beneficiary designation is filled out, current, and valid.

When an account has no beneficiary named, or when the named beneficiary has already passed away, the account typically becomes part of the probate estate. That means court involvement, delays, and added costs for the people you were trying to protect. Common issues to watch for include:

• Accounts opened years ago with outdated or missing designations
• A named beneficiary who has since passed away
• A named beneficiary who is a minor, which often triggers additional court proceedings
• Designating your estate as the beneficiary, which routes the account directly into probate

Reviewing your beneficiary designations regularly is a simple step that can prevent serious problems down the road.

How Does Owning Property a Certain Way Lead to Probate?

The way you hold title to property has a direct impact on what happens to that property after you die. Some forms of ownership transfer automatically. Others do not. For example:

• Joint tenancy with right of survivorship allows the surviving owner to inherit the property automatically
• Community property with right of survivorship (available in some states) works similarly for married couples
• Sole ownership with no trust and no co-owner typically requires probate to transfer the property

Many people do not realize that owning a home solely in their own name, without placing it in a trust or adding the right co-owner designation, leaves that property exposed to probate. Even a paid-off home can get stuck in court if the ownership structure does not allow for an automatic transfer at death.

TrustMasters Can Help You Avoid These Mistakes

Probate is expensive, slow, and stressful for the families left behind. The good news is that with the right documents and a properly funded plan, most estates can avoid it entirely.

At TrustMasters, the team works with individuals and families to create revocable living trusts, transfer assets into those trusts, and set up a complete estate plan that protects your property and your loved ones. With over 40 years of combined experience and flat-fee pricing, TrustMasters makes the process straightforward and affordable.

If you are ready to put a real plan in place, contact TrustMasters today to request a consultation or sign up for an upcoming workshop in your area.