Question:

Do I need a revocable trust to avoid probate if: 1. all my accounts have a designated beneficiary; and 2. I sign Fidelity’s form confirming the beneficiary? And as far as non-monetary assets (jewelry, car), if I designate in my durable power of attorney the authority to distribute these things as specified in my will, can that avoid probate?

I’m reluctant to spend on a trust if it isn’t necessary.

Response:

With respect to your financial assets, you don’t need a revocable trust to avoid probate, if they all have beneficiaries designated.

However, be aware that your durable power of attorney becomes ineffective upon your death. So, if your agent hasn’t already distributed your non-monetary assets (tangible personal property in lawyer-speak) during your life, they can’t do so after your death. Your personal representative (executor) under your will, who may or may not be the same person as your agent under your durable power of attorney, technically only has the power to distribute your assets after a formal court appointment. But where there’s no disagreement among family members or other heirs, usually the personal representative can carry out the distribution without the formality of going to court.

All of that said, you still might want a trust for management purposes should you ever become incapacitated. Many financial institutions are more comfortable with trusts than durable powers of attorney. Also, be aware that Fidelity and many other financial institutions have their own durable power of attorney forms. So, I would recommend that even though you already have a general durable power of attorney, that you contact Fidelity to create one specifically related to your account there.

 

Related Articles:

What is Probate Property and What Isn’t?

What is a Revocable Trust and Why Would You Want One?

5 Steps to Take When Bank Won’t Honor Power of Attorney

Do You Need a Durable Power of Attorney If You Have a Revocable Trust with a Successor Trustee?

9 Questions to Ask and Answer in Preparing Your Durable Power of Attorney