The Importance of a General Assignment of Assets in Estate Planning

Avoidance of probate is a key objective of estate planning.  Probate is a judicial proceeding which marshals a decedent’s property (or “estate”), pays of the decedent’s debts and the expenses of administration of his estate, and distributes the balance of the estate to the persons entitled to it under the law.  Probate is a costly, public proceeding, which delays distribution of an estate. 

A revocable trust is essential in probate avoidance.  But merely creating a revocable trust is not enough.  A revocable trust will succeed in avoiding probate only if the individual for whom the trust is created (the “settlor”) transfers his property to the trust during his lifetime.  The settlor’s will can bequeath his property to his revocable trust at his death, but such testamentary funding of a trust can be accomplished only by a probate proceeding.  Inter vivos funding of a revocable trust requires the assistance of estate planning counsel.

A settlor funds a revocable trust by—

  • Executing quit claim deeds conveying the settlor’s real property to the trust, and recording the deeds in the register of deeds’ office of the property’s situs.
  • In the case of stocks or interests in partnerships of limited partnerships held by the settlor, contacting the corporation or limited partnership’s transfer agent (in the case of a publicly-held corporation or limited partnership) or counsel (in the case of any other corporation, partnership, or limited partnership) and arranging for transfer of the settlor’s interest in the corporation, partnership, or limited partnership to the settlor’s revocable trust.
  • Contacting financial institutions with which the settlor has mutual funds, annuities, bank accounts, or brokerage accounts and arranging to transfer the settlor’s interests in such financial assets to the settlor’s revocable trust.
  • Executing a bill of sale transferring the settlor’s interests in jewelry, works of art, and other valuable personal property to the settlor’s revocable trust.
  • Executing a general assignment of assets transferring the settlor’s interests in all other property, real, personal, or mixed, to the settlor’s revocable trust.  A form general assignment of assets for a married couple appears here.

A recent case highlights the importance of a general assignment of assets.  In 2015 we did an estate plan for William and Ann Kennedy.  The estate plan included a revocable trust for William and Ann, a last will and testament for each of them bequeathing their estate to the revocable trust, and quit claim deeds conveying their real property to the trust.  We also drafted a general assignment of assets for William and Ann transferring their property, real, personal, or mixed, to the trust.

William died a short time later.  Since then we have reviewed and updated Ann’s estate plan, including the revocable trust.

Then, in 2018, Ann received a letter from an oil and gas production company.  The letter concerned her late husband William’s interest in certain mineral rights in West Virginia.  Upon inquiry we learned that William held the mineral rights under the last will and testament of an ancestor who died in the 1880s.  William never mentioned the mineral rights, and apparently was unaware of them. 

We had the general assignment of assets recorded in the register of deeds’ office of the county of the mineral rights’ situs.  The recorded general assignment is evidence that William and Ann’s revocable trust holds title to the mineral rights.  Hopefully, the oil and gas production company will acknowledge the revocable trust’s title to the mineral rights, obviating a West Virginia ancillary probate proceeding with respect to the mineral rights.  Needless to say, Ann is grateful that we included a general assignment of assets as part of William and Ann’s estate plan.

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Stephen J. Dunn

Tax and Estate Planning Attorney and Author

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