What assets do people commonly forget to put into a trust

Jane called me in tears last week. Her husband, Richard, passed away unexpectedly, and she discovered a critical error: the $150,000 he’d meticulously saved in a cryptocurrency wallet wasn’t covered by their Trust. Now, she faces a complex legal battle to access those funds, potentially losing a significant portion to estate taxes and legal fees. This is far too common, and preventable with careful planning.

A properly funded Trust is the cornerstone of a solid estate plan, but people often focus on big-ticket items like real estate and brokerage accounts, overlooking assets that can create significant headaches – and expense – for your loved ones. After 35+ years as both an Estate Planning Attorney and a CPA, I’ve seen firsthand how easily these crucial assets slip through the cracks. The advantage of having a CPA involved is understanding how those assets will be valued for estate tax purposes, and how to maximize the step-up in basis to minimize capital gains taxes for your heirs.

What Digital Assets Need Protection?

Many clients assume their estate plan automatically covers everything online, but that’s rarely the case. Without specific RUFADAA language in your Trust, Coinbase and Google can legally deny your executor access to your digital wallet and photos. These digital assets—cryptocurrency, social media accounts, email accounts, digital photos, and online business profiles—require explicit instructions for access and disposition. Consider the emotional value of those photos, not just the monetary value of crypto. We draft specific language authorizing your Trustee to access and manage these accounts, often including a digital asset inventory.

Are Your Bank Accounts Properly Titled?

It’s surprising how often people forget about small bank accounts or cash holdings. While California allows a simplified probate process for estates under a certain value, if your combined ‘probate assets’ (accounts without beneficiaries) exceed $208,850 (effective April 1, 2025), they are frozen until probate concludes. This can create significant hardship for your family, delaying access to funds needed for immediate expenses. Review all checking, savings, and money market accounts, ensuring they have valid beneficiary designations or are properly titled to your Trust.

What About Business Interests and LLCs?

Many of my clients are entrepreneurs or own interests in family businesses, often structured as Limited Liability Companies (LLCs). A common oversight is failing to update beneficiary designations on these entities or to address the ongoing management requirements after death. Managing a deceased owner’s LLC now requires filing an updated BOI Report with FinCEN to avoid $500/day civil penalties. Your Trust should clearly outline how your business interests will be managed, transferred, or dissolved. Ignoring this can lead to significant legal and operational complications.

Don’t Forget About Life Insurance Policies

While life insurance policies themselves are often overlooked, the real issue is proper beneficiary designation. Life insurance proceeds pass directly to beneficiaries, outside of probate, but if your Trust is designed to provide for those beneficiaries (perhaps with spendthrift provisions or for special needs), you need to name the Trust as the beneficiary, not individuals.

What About Real Estate Outside of Your Primary Home?

Most people focus on their primary residence, but often overlook vacation homes, rental properties, or land. Under AB 2016: “…effective April 1, 2025, primary residences worth $750,000 or less may qualify for simplified transfer under AB 2016 (Probate Code § 13151), but investment properties still face full probate.” Ensure all real estate is correctly titled in the name of your Trust. A simple deed transfer now can save your family tens of thousands in probate fees later.

Protecting Your Legacy with Prop 19 Awareness

Heirs inheriting real property need to be aware of the implications of Prop 19. “…under Prop 19, your children cannot keep your low property tax base unless they move into the home as their primary residence within one year.” Failure to do so can result in a significant property tax increase. Discuss this with your family, and document your wishes in your Trust.

The TCJA Sunset and High-Net-Worth Considerations

For high-net-worth individuals, the upcoming changes to the federal estate tax exemption are critical. “…the Federal Estate Tax Exemption drops by ~50% on Jan 1, 2026, putting assets over ~$7M (single) or ~$14M (married) at risk of a 40% tax.” Strategies to mitigate this risk, such as gifting or utilizing irrevocable Trusts, need to be implemented now, well before the sunset.

It’s easy to get overwhelmed with the details of estate planning, and that’s where my team and I come in. We take the time to understand your complete financial picture, identify those often-forgotten assets, and ensure your Trust is fully funded and aligned with your wishes. Don’t let a preventable oversight cause your loved ones unnecessary stress and expense.

Verified Government Resources for Estate Administration

• Property Tax Reassessment (Prop 19): California State Board of Equalization (Prop 19)
  Critically important for beneficiaries inheriting a family home; under Prop 19, the parent-child exclusion for property tax reassessment is limited. The heir must make the home their primary residence and file for the exemption within one year to avoid a full reassessment to current market value.
• Unclaimed Assets Search: California State Controller – Unclaimed Property
  A mandatory step for Trustees and Executors fulfilling their duty to marshal all estate assets. You must search this database for dormant bank accounts, uncashed insurance checks, or forgotten safe deposit box contents that legally belong to the Decedent’s Estate before closing administration.
• Federal Estate Tax Guidelines: IRS Estate Tax Guidelines
  Executors must determine if the Gross Estate exceeds the federal exemption threshold. Even if no tax is due, filing Form 706 may be necessary to preserve the Deceased Spousal Unused Exclusion (DSUE), allowing the surviving spouse to utilize the decedent’s unused exemption (“Portability”).
• Small Estate Affidavit (Personal Property): California Probate Code § 13100
  Used for settling estates without full probate when the total value of qualifying personal property is below the statutory value.
• FinCEN – Beneficial Ownership Information (BOI): FinCEN – Beneficial Ownership Information (BOI)
  Under the Corporate Transparency Act, if the estate includes an interest in an LLC or Corporation, the Executor may need to update the Beneficial Ownership Information report. Failure to update control information within 30 days of the owner’s death can result in significant federal civil penalties.

What causes California trust administration to fail due to poor funding, vague terms, or trustee misconduct?

The advantage of a California trust is control and continuity, but this relies entirely on accurate funding and disciplined administration. Without clear asset titles and strict adherence to fiduciary standards, a private trust can quickly become a subject of public litigation over mismanagement, capacity, or undue influence.

California trust planning is most effective when the structure is matched to the specific family goal and assets are fully funded into the trust name. When administration is handled with transparency and adherence to the Probate Code, the trust can fulfill its promise of privacy and efficiency.

Verified Government Resources for Estate Administration

• Property Tax Reassessment (Prop 19): California State Board of Equalization (Prop 19)
  Critically important for beneficiaries inheriting a family home; under Prop 19, the parent-child exclusion is limited. The heir must make the home their primary residence and file for the Homeowners’ Exemption within one year to avoid a full reassessment to current market value.
• Unclaimed Assets Search: California State Controller – Unclaimed Property
  A mandatory step for Trustees and Executors fulfilling their duty to marshal all estate assets. You must search this database for dormant bank accounts, uncashed insurance checks, or forgotten safe deposit box contents that legally belong to the Decedent’s Estate before closing administration.
• Federal Estate Tax Guidelines: IRS Estate Tax Guidelines
  Executors must determine if the Gross Estate exceeds the federal exemption threshold. Even if no tax is due, filing Form 706 may be necessary to preserve the Deceased Spousal Unused Exclusion (DSUE), allowing the surviving spouse to utilize the decedent’s unused exemption (“Portability”).
• Small Estate Affidavit (Personal Property): California Probate Code § 13100
  Used for settling estates without full probate when the total value of qualifying personal property is below the statutory threshold (increased to $208,850 effective April 1, 2025). This Affidavit Procedure requires a 40-day waiting period after death and cannot be used for real property exceeding specific limits.
• LLC/Corporate Compliance (BOI): FinCEN – Beneficial Ownership Information (BOI)
  Under the Corporate Transparency Act, if the estate includes an interest in an LLC or Corporation, the Executor may need to update the Beneficial Ownership Information report. Failure to update control information within 30 days of the owner’s death can result in significant federal civil penalties.