Avoid Probate with a Trust

In the case of a fully-funded revocable trust (commonly known as a living trust), the full probate process is avoided.  

Although an estate tax return, and possibly additional paperwork, will still need to be filed with the probate court, the process is much faster and simpler than a full probate process.  

A revocable living trust is known as a Will substitute, meaning that like a Will, it provides for the disposition of the client's property upon death. However, instead of the trustee being subject to probate court supervision, which is the case with an executor of an estate, the trustee is able to complete the administration process in an expedited matter.

This does not mean that the trustee can immediately distribute assets to the trust beneficiaries, but the living trust does offer certain advantages over a probate estate settlement. The administration of a living trust after the decedent's death

  1. results in lesser costs associated with estate settlement;

  1. provides immediate access to the decedent's assets upon death unlike a probate administration which could take weeks to gain access to the decendent’s assets;

  1. keeps matters private because it is not filed in the court or anywhere else. Consequently, the estate plan as well as the nature and amount of the decedent's assets are private.

Even in the case of a fully-funded living trust and no full probate estate, it is prudent to obtain competent legal counsel to expedite the trust administration process, ensure that the estate tax return and any other necessary forms are filed, and facilitate the distribution of assets to the beneficiaries

How About Joint Accounts?

You may be inclined to achieve probate avoidance by establishing joint bank accounts, payable on death bank accounts, or transfer on death brokerage accounts. While all of these effectively avoid probate, they may not adequately preserve your estate plan as a living trust does.

There is a greater risk with these other forms of ownership that your assets might pass in a manner that may not be entirely consistent with your wishes.

Upon your death, these accounts pass to the named joint owner or beneficiary, who is not obligated to share with your other beneficiaries under your Will or Trust.  This means that one individual may receive a greater share of your estate than you intend. Therefore, such forms of ownership are typically not recommended merely for estate planning purposes, but they may be prudent in certain situations, such as when an individual only has one beneficiary.

The settlement of a probate estate or the administration of a living trust after the creator’s death requires special care. Competent legal counsel is the best way for the person who is appointed to handle such administration to receive the necessary guidance to carry out the decedent's wishes.

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