Attorney Thomas B. Burton answers the following question: "Mom Passed Away With Trust But Her Home Was Never Titled in Trust?"
Want to know what type of estate planning documents are best for your situation? Download a free copy of my easy estate planning guide. Obtain Your Free Will vs. Trust Estate Planning Guide here.
➮ Subscribe to Burton Law LLC’s channel to get notified when we post new videos. Subscribe here
Hello and welcome back to our Question and Answer Series.
I'm Attorney Thomas Burton.
I'm an estate planning and asset protection attorney here in Wisconsin and on this channel, I answer real viewer questions monthly, pro bono as a service to the public, in order to help inform and educate others to take charge of your own estate planning.
So this video, this question comes from Milwaukee, Wisconsin and they write the following: "Mom passed away with trust but her home was never titled in the trust. We are trying to sell the home but the title company says we need to go through probate. We have a trust document that says everything she owned, owes, I think it means owns but I'm not sure, is in the trust. The house is in my mom's name. When my dad passed in 2017, there was a Trustee Deed in my mom's name and she signed on behalf of my dad's trust document which is the same as my mom's. The house is only being sold for $45,000."
Okay, so the first thing, I suggest, is you need to check and see if there was ever a deed recorded transferring the title of the home into the trust. So look at the date, they formed the trust and usually, the date of the deed should be shortly after that. If they do it like at my office, I often form a trust and then I help clients put their house into the trust right away by executing a Quitclaim deed and recording it in the county where the house is located. So if the deed was not recorded, this is probably what the title company is seeing in the deed records and why they are suggesting a probate but if a deed was recorded then the house should be inside the trust and you don't need to open a probate to pass it to the heirs, you just need to follow the trust document but the key is to determine, if the house was ever placed inside the trust. The actual deed, the title to the house was placed into the name of the 'Smith Revocable Trust', let's say.
And for Real Estate, the key is going to be a deed transferring it in. Now in Wisconsin, a married couple can pass assets under a Marital Property Agreement upon death. So if there is a marital property agreement in the trust binder, that could be one option to get it in after death. I would sit down with a qualified probate and estate planning attorney to look through the documents you have before you open the probate because it's possible you may need a probate in this situation, if that step was missed of transferring the house into the trust but there may be a way to get it into the trust now, after death, short of a full-blown probate, where you spend several thousand dollars on the court administered probate process.
Finally, if the total value of the probate assets are less than $50,000, then there may be a simplified method, we could get the house into the trust or into the name of the heirs because the key for Wisconsin is $50,000 of probate assets or more that pulls you into a full probate court action. So if the only, I don't know if the house is the only asset though. If you've got a bank account of $6,000 and some other personal property worth $8,000, then you're going to and you're telling me the house is 45, then you're going to be over that limit but if the house was literally the only asset and it for sure is under 45, then that method might work. So I would sit down with a good attorney and show them all these documents before you rush to open the probate because once you, if you open the probate like it says, going to cost several thousand dollars and you need to deal with the probate court process.
So the title company is probably just looking at what they see in the title records and you really need to meet with your own attorney to look through all this, before proceeding.
So good question, thank you for asking. I see this happen not infrequently, I should say, where sometimes, someone makes a trust but forgets to put the assets inside the trust and at my office when I'm planning a trust plan, I try to put in lots of backup methods, as many as we can, to get assets into the trust to do this specifically to avoid probate. Now if they had a trust, check and see if they had a will as well. Generally, with a trust plan, at my office, will execute a Pour Over Will which will say, 'Anything I forgot to put into the trust, I pour over into the trust upon my death' and that's one way to get assets into the trust after death but it's not my preferred method because we still have to use the probate court to get them in, when it passes under a will but it would be an option for you here, possibly, to get the asset into the trust, if you need to do it using one of the other methods I mentioned.
So again thank you for this question, thanks for asking and thanks for watching and we'll see you next time.
© 2021 Burton Law LLC. All Rights Reserved. Transcript and captions provided for ease of access for the hearing impaired. For questions about this topic, or to suggest a topic for a future blog post, please contact the office.