Hello, everyone. This is Robert Mansour. I wanted to make a brief video today to explain that your living trust only governs assets that you actually own. I had a client recently and he brought this living trust to me, and he had been divorced for several years, and in his living trust he had all kinds of things written there. I think it was kind of a trust that he downloaded from the Internet or something like that, and he had a lot of assets listed in the trust that were real estate, bank accounts, things like that.
Probably a good dozen pieces of real estate were listed in his trust, and he asked me to review these trusts and give him my opinion, and so I was reviewing the living trust and I found a lot of problems, but the biggest problem that I found, was that none of the real estate properties that were listed were actually his. They were in other people's names, in his former spouse's name, in another trust that's not his trust. I think it belongs to his former spouse.
I asked him, I said, "What are you doing writing all of these things down in your trust?" He was, "Well, I want these things to go here and there, and I want them distributed to so-and-so, and I want this parcel of real estate distributed and so-and-so," and I said, "You realize there's no magic powers in a living trust?" You can't just write down any asset you want, and suddenly, that asset is going to magically go to so-and-so.
I said, "You don't even owned these things. These things are owned by other people, so you can't just by virtue of listing them on some kind of a schedule or listing them in the trust, they're not going to magically go to those people when you die." He said, "So what's going to happen?" I said, "Nothing. Your living trust is meaningless. There is nothing in your trust that you actually own." He doesn't have the legal authority over any of those assets.
This also happens when clients simply write down their assets. Maybe they own those assets, never mind assets owned by other people. They own the assets and they write them down in their trust, and they list them, and they mention them in the trust, and they think that by virtue of simply listing them in the document or writing them down on a schedule of assets of some sort, simply by writing them down or putting them inside of their binder, that that magically means that that asset is now governed by their trust.
I explained, "No, no, no." First of all, you have to own the asset and if you do own the asset, you actually have to transfer the title on the asset to the name of your trust, so you have to file a new deed for your real estate. You have to go to the bank and tell them to move your account from your name into the name of your trust and there's paperwork involved.
Please understand, simply by virtue of listing the assets in your living trust binder and writing them down, that doesn't mean anything. It's important and it's helpful, but that doesn't really mean that the asset is actually in the name of your living trust, and therefore, governed by it. That includes assets that you own, and certainly assets that you do not own, you couldn't even move them into your trust if you wanted to because they're not yours.
There are no magical properties about a living trust, so please understand, properly titling your assets is very important as part of creating a proper living trust. Thank you very much for watching this video. I hope you found it helpful.