If you want to help your kids bypass probate when you die, here are 5 assets to avoid putting in a living trust

“I hate probate,” Pete tells us in an exclusive interview (what else did you expect? We created him). “I went through it when my father died, and my family spent the next year talking to lawyers, trying to get things squared away.”

He shares how the probate process caused tension between his siblings. He also harbored frustration over one unanswerable question: “Why didn’t Dad create a living trust? It would’ve made things so much simpler.”

Credit Pete for following his own advice. He has set up a living trust. Now, he must decide what, if anything, to leave out of it. He has done the homework for you: Here are five things to consider as you structure your living trust.

Probate explained: Best not go there

Many folks don’t even know what the word “probate” means until they’re in the thick of it.

Sometimes, not always, when a person dies — even if they left a will — a legal process is required to validate the will, name an executor to administer the estate if there isn’t one already, pay off liabilities, and then distribute the remaining assets.

The process can sometimes take years, not to mention the piles of paperwork and legal fees. For example, when the beloved entertainer Prince passed away in 2016, the legal dogfight over his estate continued in probate until August 2022.

If you are “of sound mind and body,” then you can make a will — and it’s a good idea to do that, so you don’t leave your friends and family scrambling and trying to guess at your wishes.

If you want an extra layer of security and peace of mind, you can create a revocable living trust. A trust would have helped Pete’s family avoid probate, protect their privacy, and minimize estate taxes when his father died. A trust is a document that allows you to keep control of your money and property and designate who receives it once you die.

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“Revocable” means you can change the terms at any time while you are alive. As the assets aren't considered a part of your estate, they sidestep the probate process.

It also lets you continue to use assets transferred into the trust, such as property or investments you own.

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However, the advantages of trusts have their limits and certain items will only create headaches if held there.

Five items to leave out of a revocable living trust

Vehicles. Whether it’s a 1963 Corvette, a Harley chopper or a prop plane, all that’s required to pass it on is a simple written instruction to transfer the title to a beneficiary. If it’s held in a trust, you could be vulnerable to lawsuits over accidents involving the vehicle.

Annuities and retirement accounts. A trust can turn non-taxed accounts into taxable ones. However, you can make the trust itself the beneficiary, so that these accounts pass directly to your trustees without an IRS agent crashing the wake.

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of Thor Metals.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainties.