John and Mary Smith were married and had three children. One of their children had predeceased them and that child had two children. John and Mary were intelligent people and attended seminars and reviewed information they found available on the internet regarding estate planning. They knew that the wanted their estate to be distributed to their surviving children and that they wanted to avoid probate. However, John and Mary did not completely understand how to fund their trust. They simply completed a form and named it “The John and Mary Smith Trust” and another form entitled “Exhibit A” that was attached to the trust.
If John and Mary had met with an estate planning attorney they would have been advised that when it comes to real estate, deeds transfer the property into the trust. Further, a Pour-Over Will would have been prepared to inform the court that if any assets had been overlooked, those assets should be included in the trust estate. John and Mary’s trust directed that their assets should would be distributed to the survivors of their children. However, because the real estate was not transferred by a deed into the trust, it was subject to probate. There was no Pour Over Will to inform the court that they wished to include assets which may have inadvertently not been funded into their trust. Therefore, the probate estate would be distributed by intestate succession under the laws of Colorado. The real estate which was subject to probate would not pour into the trust but would be distributed pursuant to Colorado law to the surviving children and a share to the children of their deceased child. The trust assets would be divided among the surviving children.
Consulting with an estate planning attorney regarding the importance of proper funding and the ancillary documents that should be included in your estate plan is critical in accomplishing your objectives. Special consideration should be given to certain types of assets, such as IRA’s or tax deferred accounts.For additional information on Colorado probate, intestate succession, pour over wills, trusts or any other questions regarding estate planning, please visit the Hughes Law Firm.