Many Florida homeowners believe that simply creating a Revocable Living Trust automatically protects their estate from probate. In this episode of Trust This, Florida Asset Protection Attorney Joe Seagle explains why that assumption can create costly mistakes. A trust only works as intended when assets are properly funded into it. Joe walks through the most common errors he sees, including assets that were never transferred into the trust and others that should never have been placed there in the first place.
During the discussion, Joe explains which assets generally belong in a Revocable Living Trust, including Florida homestead property, LLC membership interests, land trust beneficial interests, stocks, investment accounts, and bank accounts. He also discusses alternatives such as Lady Bird Deeds and Transfer on Death designations, explaining when they may be the better option depending on your family’s circumstances and financial institution. The episode also covers retirement accounts, IRAs, 401(k)s, and life insurance policies, emphasizing why professional legal guidance is critical before making beneficiary changes that could trigger unintended tax or estate planning consequences.
One of the most valuable takeaways is Joe’s warning about assets that should never be titled in a Revocable Living Trust. Vehicles, boats, RVs, and aircraft can expose every asset inside the trust to liability in the event of an accident. Understanding proper trust funding is one of the most overlooked aspects of estate planning, yet it can determine whether your family avoids probate or faces unnecessary legal complications.
Watch the full episode of Trust This with Asset Protection Attorney Joe Seagle to learn how proper trust funding can help protect your assets, avoid probate, and ensure your estate plan works exactly as intended.
Transcript:
A lot of people think that just because they have a revocable living trust, that their n heirs are never gonna have to deal with probate. But unfortunately, that’s not the case if it’s not done right in the first place. I’m Joe Siegel, I’m an estate planning and asset protection lawyer in Florida, and we have this come up all the time, unfortunately. People come to us and say, Hey, I’ve got a revocable living trust. That means I’m gonna avoid probate.
We start looking at their assets and how they’re titled, and nothing has been put into the trust as it should have been, or things have been put into the trust that never should have been. So today I would just want to go through some quick things about what should go into your revocable living trust as soon as possible, and what should stay out of your revocable living trust at all times, and what things you may or may not want to put into your revocable living trust. Number one is your homestead, your primary residence in Florida.
Typically, you’re going to want to put this into your revocable living trust so that your wishes of what happens with that homestead upon your death are carried out. An alternative to this is that you can do what’s called an enhanced life estate or a ladybird deed, where you title the property from yourself to yourself, and then upon the death of you or you and your spouse, then it goes to the successor trustees of your revocable living trust to be handled. Either way.
ultimately gets into the trust and then the trust handles it. Different circumstances come into play when we’re trying to determine whether we want to move it into the trust immediately or whether we want to just do it upon the last death of the last spouse. And that unfortunately it depends on the circumstances of the family and and how things are working out as to what we recommend doing. So just want to let you know that that’s one of the ways that you can do that.
stocks LLC membership interest land trust beneficial interest absolutely these should somehow get into your revocable living trust again whether they the beneficial interest the stocks the membership interest are assigned immediately to the trust can be one way it’s done we do that all the time or you can again do a transfer on death where it stays in your name for now but upon your death it automatically transfers in it’s going to depend on buy sale arrangements
in your operating agreement or in your bylaws or if you have a buy seller agreement in in a corporation. The land trust is pretty easy. Those are easy enough to do. But typically you want those held directly in your revocable living trust so that as you change and amend your revocable living trust as you get older, you change it one time and it’s automatically changed for any other assets that are in the trust while you’re alive. Bank accounts.
This is another one we get a lot of questions about. Should I put my bank account right into my Revocable Living Trust now? It really depends on your bank. Some banks, whenever you do that, they have to open a whole new account. And when they open the whole new account, if you have Bill Pay and Zell and all these other things tied to your current online banking, you lose all of that when they open the new bank account. So it depends on convenience for you and how much you time you want to spend on that.
Other banks go, it’s fine, we’ll open the new account, we’ll move it over and we’ll move all your settings over. So go ahead and put it into the trust now. That’s great if you can do that. Otherwise, if it’s going to be a real inconvenience, the transfer on death is one of those things that you can use that upon your death, it automatically goes over into your trust without having to go through an estate for any reason whatsoever. Investment accounts, treat those the same way as a bank account. Again.
They’re going to probably have to open a whole new account in the name of the trust and transfer things over. However, the inconvenience is much lighter because most investment accounts don’t have bill pay and all this online banking baggage that comes along with it. And typically you can use your same login, just you just get a new account number and a new account name. But again, if it is going to be an inconvenience, you may want to consider a transfer on death provision added to the name of your
investment account your brokerage account so that upon your death it automatically dumps over into your trust and the successor trustee can then handle dealing with the the account with no problem some maybes these are the maybes of maybe you want to move it into your revocable living trust maybe not you need to talk to a lawyer about this retirement accounts IRAs
I’ve written about this, it’s on our website. You should go look at it, search for the blog about IRAs and trusts. It’s a whole topic in itself. I’ve also done videos about that. So you definitely need to be careful before you just name your trust as a beneficiary of your IRA or your 401k. Life insurance policies, a lot of people want to go ahead and name their revocable living trust.
as the beneficiary or the owner or both of their life insurance policies. that’s typically not recommended, but it is a maybe that you can maybe do that. Again, talk to your lawyer, your estate planning and asset protection lawyers about that before you do it, because it can cause tax problems, it can tell it cause a lot of other problems as well, as opposed to just going straight to a beneficiary
Outside of the trust and outside of your estate. Nevers. These are things you never ever want to put into your revocable trust. Cars, boats, and RVs. Anything that can move on water or land can hurt someone really badly and it will be your fault. You do not want that to be owned in your trust.
Because it will definitely pull everything that you’ve already titled into that trust. It will 100% pull all of those assets into that car wreck, that boat crash, that RV catastrophe. So always keep anything that moves on land or on the water or in the air. Airplanes, forget about those. I always forget about airplanes. Anything that moves on air, land, or water, do not put those into your trust. You’ll want to put those into something else.
Just not into a trust. And make sure you have lots of insurance and umbrella coverage as well over and above whatever your liability insurance is. So hope that helps everybody. If if you find this interesting, please follow. Like, subscribe, comment below. Let us know any other questions you have, because we love to do videos like this and keep everybody up to date on things that are happening.
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