Every good living trust needs a good schedule of assets. The schedule is sometimes known as "Schedule A." Basically, this schedule is a written list of all the assets that are in the name of the living trust. This includes bank accounts, investments, real estate and much more. Anything that is governed by your living trust should be listed on the schedule. The schedule can usually found a near the end of your living trust or in a separate section. It must be clear that this schedule is for your particular living trust. Therefore, the title of the schedule would say something like "Schedule A: Trust Assets for the John Smith Trust, dated November 4, 2004."
Essentially, there are two reasons to have a good schedule of assets for your living trust. The first reason is practical. Having a list of all the trust assets basically makes life easier for your trustee. They don't have to wonder what's in your trust or scour your entire home, wrestling with boxes of documents.
The second reason to have a schedule of assets is legal. You are listing assets to establish your "intention" to include said assets in your trust. Basically, if you forgot to put an asset in your trust, the mere fact that you had listed it on your schedule of assets is good enough for most judges. A court case from the 1990s known as the Heggstad matter allowed a family to include assets listed on a written schedule as "trust assets," even though the assets were not in the name of the trust. They argued, and the judge agreed, that listing the assets on a schedule of assets was evidence of "intention" to include an asset.
Therefore, instead of a full probate proceeding regarding an asset or two left out of the trust, attorneys can sometimes petition the court (a Heggstad Petition) to include the asset(s) as a trust asset if evidence of "intention" can be established. Therefore, by listing an asset on your schedule, most judges are convinced that you had the intention of putting the asset in your trust, even if for some reason, it did not end up in the name of the trust.
To learn more about estate planning, please call our office at 661-414-7100.