Living trusts keep your assets out of probate court if you pass away, because the trust technically owns everything. The person you name as the trustee takes over your assets and acts according to the wishes you laid out in the trust. However, not all of your assets can or should go into a living trust. Here are some items that you shouldn’t include in a living trust. Everyone’s financial situations and circumstances are different—make sure you talk with your estate planner to ensure that you include assets that you can legally leave to your beneficiaries. If you want to use your trust to pass on and distribute your retirement funds, you can name the trust as your account’s beneficiary and have the trust worded to structure the distributions among your heirs. You can’t retitle these accounts in the name of your trust. If you feel that you have to place your HSA or MSA into your trust, the trust should be designated as the primary or secondary beneficiary of these accounts. In this case, a successor custodian (and maybe a third) should be designated. This keeps the trust from being sent back to probate court if the primary custodian dies before the minor reaches adulthood. If you have a life insurance policy, it is best to establish beneficiaries using the policy rather than retitle it to a revocable trust. If you feel that you must place the funds from your life insurance policy into a trust, check with your estate planning attorney before doing so. If this applies in your state, then you may want to purchase your vehicle in the name of the trust. In some states, probate is not necessary to transfer ownership of a vehicle after the owner dies. Other states allow vehicle owners to designate a beneficiary. When you’re getting your affairs in order, it saves your beneficiaries time and money to use an estate planning attorney—they won’t have to hire another attorney to help them deal with legal proceedings after you’re dead or incapacitated.
