I just got finished reading another online post about a living trust plan going wrong. The decedent had used Legal Zoom to create his legal trust plan. According to the post, the decedent had sent form letters provided by Legal Zoom to his banks and financial institutions to change the title of his assets to himself as trustee of the trust. But somewhere along the way, the banks never made the title changes. The decedent then passed away, and the successor trustee went to the banks to inform them of the decedent’s passing. The banks then said that they have no record of a change of title to the bank accounts, and the accounts are still in the decedent’s name at the time of his death. Sorry, you are going to have to probate the assets.
Now I am not bad-mouthing Legal Zoom. In fact, it sounds like they did their job properly by providing the decedent with letters to follow up with his bank and other financial institutions about the title change. This was an error by the decedent, as he should have made sure that each and every bank account he wanted in his trust was titled properly. He was, after all, acting as his own attorney!
There is some hope for this trust in California, as the successor trustee can file a court petition to order the transfer of these bank accounts into the trust if there is sufficient evidence to show that the decedent wanted this to happen. But a lawyer will have to get involved to prepare the petition, which will cost money and time, and the petition is not a guaranteed thing.
The moral of the story is this. If you are going to prepare your own living trust, please, please, remember to fund the trust, and make sure you change the title of your accounts to the trustee of the trust. If you don’t, it’s just a big stack of paper.
