Question

Describe a specific scenario where a revocable living trust would *notprevent probate.

Accepted Answer

A revocable living trust avoids probate only if assets are properly titled in the name of the trust *beforethe grantor&#x27;s death. A scenario where probate would still be required is when the grantor fails to transfer all intended assets into the trust during their lifetime. For example, if a person creates a revocable living trust and names themselves as trustee but forgets to retitle a brokerage account or a piece of real estate into the name of the trust (e.g., &#x27;John Smith, as Trustee of the John Smith Living Trust&#x27;), those assets remain in their individual name. Upon their death, because these assets are not owned by the trust, they become part of the probate estate and will be subject to the probate process, regardless of the existence of the trust. This necessitates going through the court system to transfer ownership of these assets to the beneficiaries named in the will or, if there&#x27;s no will, according to state intestacy laws. A pour-over will can direct any assets still held in the individual&#x27;s name at the time of death to be transferred into the trust, but that transfer still requires probate.

Home → All Courses → Business and Economics Courses → Financial Literacy Certification → Flashcard

Describe a specific scenario where a revocable living trust would *notprevent probate.

Community Answers