The revocable living trust is by far the most popular trust document available. You may have heard it referred to as a revocable living trust, a revocable trust, or a living trust—these terms are often used interchangeably. The primary reason people establish a revocable living trust is to avoid probate. However, today, I want to discuss the number one reason why your revocable living trust may not actually help you avoid probate.
Before diving into that issue, it’s important to understand what probate is and what the process entails. When a person passes away, any assets that are still titled in their individual name must go through probate—a legal process overseen by the probate court in the individual’s local jurisdiction. This process involves inventorying assets, submitting legal paperwork, obtaining asset valuations, settling outstanding debts, and distributing remaining assets to heirs. On average, probate lasts one to two years, but I’ve encountered clients who have spent four, five, or even ten years navigating probate in certain jurisdictions. It can be a long, complex, and expensive process, which is why many people choose to work with an attorney to handle legal filings, tax returns, and other required documents.
Since avoiding probate is the number one reason most people create a revocable living trust, the proper way to achieve this goal is to transfer ownership of assets from an individual’s name into the trust’s name. By doing so, the trust becomes the legal owner of the assets, and when the grantor passes away, the assets remain under the trust’s control rather than passing through probate.
The Number One Reason Your Revocable Living Trust Won’t Avoid Probate
The main reason a revocable living trust fails to avoid probate is simple: it was never properly funded with assets. In other words, some or all of the person’s assets were never retitled or assigned to the trust.
This happens for several reasons. Many clients don’t realize that it is their responsibility to ensure their assets—such as real estate, cash accounts, vehicles, brokerage accounts, and other financial holdings—are transferred into the name of the trust. Additionally, tangible personal property like furniture, jewelry, artwork, electronics, and athletic equipment also needs to be formally assigned to the trust. If these assets remain in the individual’s personal name at the time of their death, they will have to go through probate.
A significant cause of this issue is miscommunication or lack of guidance from attorneys. Many clients believe that once they sign their trust documents, they are automatically protected from probate. However, some attorneys fail to inform their clients about the necessary funding process, leading to a misunderstanding about what the trust actually accomplishes. In other cases, there may be negligence on the attorney’s part, or the client may simply forget to complete the funding process.
Another common issue I see—particularly in states like Texas—is that some attorneys do not prioritize trust funding because they assume that probate is inevitable. In Texas, for example, even if a revocable living trust is fully funded, the will still needs to be submitted to the probate court. Because of this, some attorneys take a more relaxed approach and don’t actively encourage clients to fund their trusts. The problem is that clients often don’t realize this, and they assume their trust will help them avoid probate when, in reality, their attorney may not have structured the estate plan with probate avoidance as a primary goal.
How to Ensure Your Trust Works as Intended
To avoid probate, you need to do the following:
- Understand whether your attorney is actively helping you fund your trust or whether they expect you to handle it yourself.
- Ask clear questions about the implementation process and determine who is responsible for transferring assets into the trust.
- Verify that every major asset—real estate, financial accounts, personal property, and other valuables—is properly titled in the trust’s name.
- Confirm whether probate will still be required in your state, even if you have a revocable living trust.
Simply having a revocable living trust does not guarantee that you will avoid probate. The key step is ensuring that all assets are properly transferred into the trust. If you don’t complete this step, your trust won’t serve its intended purpose, and your estate may still have to go through probate.