Out of curiosity, I went out on the net to read about personal property trusts and most of what I found was about transferring personal property into a trust. I found a lot of references to avoiding
probate on personal property by having it transferred into a living revocable trust. This is not necessarily true.
Let me explain why.
Nothing that you can transfer or give to someone else without signing a paper will go through probate. Jewelry, furniture, household items, clothes-all the stuff you can transfer without a signature-does not have to be probated. There may be a lawsuit over who gets it, but that's not probate. If someone can
break into your house, get the item, and sell it without forging your signature, there won't be any probate on that item when you die.
It doesn't hurt to have a statement of transfer of personal property into the trust, but it is not necessary. Many of the "schedules" that "attach to the back of the trust" have language in them that transfers all personal property into the trust. At that point, the trust could be considered a personal property trust, because it holds
personal property.
Property that requires a signature to transfer or access will be subject to probate when you die. Bank accounts, safe deposit boxes, brokerage accounts, real estate, etc. are not personal property and require a signature to transfer. Cars, boats, airplanes, etc., are considered personal property, and also require a signature to transfer. If it requires a signature, it needs to be owned by your living revocable trust to avoid probate when
you die, whether or not it is considered personal property. If it does not require a signature, then there won't be any probate and it doesn't need to be "owned" by your living revocable trust.
Other items that do not require a signature to transfer or sell do not need to be put into a trust. My rule of thumb is: "If you can buy the item at Walmart, you don't need to worry about a specific distribution, unless the item has some sort of significant sentimental
value." It can be a good idea to "distribute" personal property that could cause a family fight by designating a beneficiary for the items in your trust.
