Ideally, when someone passes away, the paperwork and material concerns associated with the
deceased’s passing are so seamlessly handled (thanks to excellent preparation) that they fade
into the background, allowing the family and other loved ones to grieve and remember the
deceased in peace.
In fact, the whole business of estate planning—or at least a significant piece of it—is concerned
with ease. How can money, property, and legacies be transferred to the next generation in a
harmonious, stress-free, fair process? To that end, many people strive to avoid burdening their
loved ones with the complications and costs involved with probate.
There are numerous tools of the trade that a qualified attorney can use to keep your money and
property out of probate, for example, establishing joint ownership on bank accounts and real
estate titles, designating beneficiaries for life insurance policies and certain accounts, and so
on. However, setting up a revocable living trust is quite often the best, most comprehensive
option for avoiding probate. Let’s discuss why this is true.
What is a trust?
Often touted as an alternative to a will, a trust is a legal structure that owns your accounts and
property or is named as the beneficiary of certain accounts and property (like a retirement
account) and is managed by a trusted decision maker, also known as a trustee, on your and
your beneficiaries’ behalf. A living trust is established while you are still alive, as opposed to
being created upon your death. You can be the trustee for your own living trust until you are no
longer able to manage your financial affairs or you pass away, at which point your chosen
backup trustee, also known as a successor trustee, steps up and assumes the responsibility for
managing the trust on your or your beneficiaries’ behalf.
How does a trust help you avoid probate?
The purpose of probate is to transfer property ownership for all accounts and property that are
owned in your sole name and that do not have a beneficiary, pay-on-death, or transfer-on-death
designation when you pass away. A trust can bypass this process completely because your
accounts and property are either transferred to the trust while you are alive, or the trust is
named as the beneficiary at your death. Therefore, when you die, there is nothing that needs to
be transferred by the probate court (everything is already in your trust or was transferred to the
trust automatically at your death). Furthermore, a trust can cover virtually any type of account or
property, from real estate to heirlooms to stock to bank accounts. When a trust is structured
correctly with the help of an experienced estate planning attorney, your affairs can stay out of
probate court entirely. This process not only limits court costs but also maintains the privacy of
your financial records while enabling your beneficiaries to enjoy the benefits of the trust without
disruption or delay.
Establishing a trust can seem a bit complicated, and the process can cost a bit more initially
than preparing a will. However, if you are willing to invest a little more up front, a trust can be
your best option for avoiding probate later.
The key to effective planning that minimizes the likelihood of a drawn-out, contentious,
expensive process is to work with highly qualified, trusted people. Find a lawyer who genuinely
cares about you and your loved ones and who knows how to forge the right strategy for all of
you.
Book a call today to learn more about next steps for achieving the peace of mind you
deserve.
