Revocable Living Trusts in Arizona
Question: My parents had an attorney draft a revocable living trust more than 20 years ago. In this revocable living trust my sister and I were the co-trustees and the co-beneficiaries. My parents transferred, by a deed, their Chandler home into this revocable living trust. Since that time my sister has had significant drug problems, and has become estranged from my parents. Three years ago, and with the help of the Internet, my parents drafted a second revocable living trust which named me as the sole trustee and the sole beneficiary. Both of my parents have recently passed away. Inasmuch as I am the sole trustee of the second revocable living trust, I executed a listing agreement with a real estate agent to sell the Chandler home. My real estate agent says, however, that the Chandler home was never transferred by a deed into this second revocable living trust. In other words, the title to the Chandler home is still in the name of the original revocable living trust with my sister as co-trustee and co-beneficiary. I have no idea where my sister lives now. What should I do?
Answer: A revocable living trust is generally an inexpensive way to avoid probate, and to transfer real and personal property to heirs. The number one problem with a revocable living trust, however, is the failure of the trustors (such as your parents), to properly fund the revocable living trust, e.g., record a deed of the home to the second revocable living trust. In other words, although the intent of the trustors is usually to have all of their assets, e.g., stocks and bonds, motor vehicles, and real estate, transferred into the revocable living trust, the proper transfer paperwork such as deeds and bills of sale is frequently not done. You should contact an experienced estate planning attorney to review all of your parents’ estate planning documents, including both revocable living trusts.