The purpose of a trust or will is to try to administer a person’s estate so smoothly and easily that the family can focus on grieving and closure. For many, eliminating distractions is an important part of the ability to focus on the grieving process. Again for many, this often means avoiding probate and court supervision of the deceased’s estate.
Fortunately, there are many legal options that an attorney can use to avoid probate. Some of these options include joint tenancy and joint ownership, beneficiary designations, and trusts. The vast majority of the time, a living trust is the best tool that an attorney has.
What is a trust?
A trust is a legal document that allows your property to be administered by a trustee for your beneficiaries. A trust is effective as soon as you create and fund it, and it allows your trustee to distribute out your property to your beneficiaries over time, rather than in one lump sum. A trust also provides you with protection if you are incapacitated and continues to provide for you and your loved ones.
How does a trust help you avoid probate?
Probate is the process of administering your will and retitling your property to your heirs’ ownership. It is a public process and supervised by a judge.
When you create a trust correctly, you transfer ownership of your property from you to your trust. This does not effect how you control your property while you are alive and well (as long as you are the trustee). A trust avoids probate simply because the property is already retitled into the trust. Even after you pass away, your trust continues to own the property. Your trust property is then only distributed out to your beneficiaries when the trust dictates, which may be years after your passing. So, not only does your trust avoid probate and its attending court costs, it keeps the process private.
Establishing your trust is more complicated than a will, and is probably more expensive, but a trust’s administration can offer several advantages over than of a will. It can also offer you additional flexibility in your planning that is personalized to your life situation and your beneficiaries.