September 16, 2019










Is Probate Necessary If There Is a Trust?

Probate requires that property you own goes through the court before it can be distributed. When you create a trust, you no longer own the property because you transfer ownership into your trust. Therefore, probate is not necessary. If, however, you leave a piece of property out of the trust, your loved ones may have to continue through probate even if you created a trust for your other assets.

One of the primary reasons to create a trust is to avoid probate court. Trusts are surprisingly easy to create, especially if you work alongside a skilled estate planning attorney. While they do take a little setup time and some work on your end to move over your assets, once you are done, your family will no longer have to worry about going to probate court or worrying about spending countless fees on attorney and court costs to finalize the estate.

How Does a Trust Help Avoid Probate?

When you own property in your name, that property must go through probate court. The court verifies the validity of your will, the property amount, and makes sure that it goes to the proper party (per your will). The process can take anywhere from six weeks to six months, making loved ones wait to receive inheritances.

With a trust, you no longer own the property. While it is technically yours, the property is now owned by your trust and you are named the primary trustee. Now that you no longer personally own that property, probate court does not apply. From there, your trust automatically would transfer ownership to your beneficiaries, per your designation, upon your death. Also, a trust does not end when you pass away. Instead, it serves as a legacy, and it can continue on long after you pass away.

With your attorney’s help, you will name an administrative trustee. This party has the legal authority to step in on your behalf after death. They will administer your trust per any instructions you have left behind, and they will take control of the trust, assets, and any business interests you might have. They may also collect from retirement accounts, life insurance policies, and pay any outstanding debts using assets (including those from the trust) before distributing the rest to your beneficiaries.

When a Trust Does Not Help You Avoid Probate

The purpose of a trust is to make the process of resolving your estate easy and relatively cost-free for loved ones. However, it does not always prevent loved ones from enduring probate court, especially if your trust is not created correctly or you are missing assets.

When you form the revocable living trust, you must transfer ownership of the property into the name of the trust. Often, this is the biggest reason a family with a trust still goes through probate – because no one transferred the ownership. Also, any property you purchase after your trust is created must be moved into the trust or it will go through probate even if the remainder of your estate does not.

Just because you have a trust does not mean all new asset acquisitions go through it. Instead, you still must update the trust and physically transfer ownership over to it. Therefore, you should make it a habit to automatically transfer over any assets you purchase into your revocable trust as soon as you can. This may mean transferring assets on a monthly basis, depending on how often you acquire new assets.

Do You Really Need to Avoid Probate?

Probate is an in-depth process that can take weeks or months to complete. While it is in process, loved ones cannot receive their inheritance and they may have to spend estate funds to cover attorney’s fees, court costs, and more.

Just some of the stages your estate goes through if it does pass through probate include:

  • Your will is first filed with the local probate court and now becomes a matter of public record.
  • Your named executor will then inventory property and assets associated with the estate.
  • Your property is appraised by a third party to determine current value.
  • Your estate’s debts, including your final taxes due, are paid by the executor. Some assets may be sold in order to satisfy those debts.
  • The court finally validates the will.
  • All fees to the court, attorney, and the executor are paid.
  • Any remaining assets are distributed to the designated beneficiaries in the amounts (or close to) that were listed in the will itself.

A living trust bypasses these steps. Your assets are passed from one party to another from the trust, and the court does not require an appraisal or have to approve the passing of those assets.

Hire an Attorney to Help Your Estate Pass over Probate Court Entirely

The best way to avoid probate is to hire an attorney and have them create a trust for your loved ones. Trusts are not just for today; they serve as a living legacy. You can use the trust to support your loved ones for years after your death, and you are in more control of your assets and how they are handled.

Another benefit to using a trust is that your estate is not a matter of public record. Instead, the assets and beneficiaries who receive the assets from the estate are kept private.

To explore your options for setting up a trust, meet with an estate planning attorney like the Law Office of Andrew M. Lamkin, P.C. Attorney Lamkin has helped countless families just like yours create trusts that provide for them while they are alive and long after they pass. He can help you not only create your trust, but also make sure you have a well-balanced estate plan where no asset is overlooked – to ensure your family doesn’t go to probate court for missed assets.

To get started, schedule a free case evaluation by calling 516-605-0625 or request more information online.

Speak Your Mind

*

To use reCAPTCHA you must get an API key from https://www.google.com/recaptcha/admin/create