What is the Probate Process?
Probate is the legal process where a court case decides what happens to the assets and properties of a deceased person. The probate process determines:
- If a will exists and if it is valid
- Who the heirs and beneficiaries are
- How much the property is worth
- How the deceased’s financial responsibilities will be managed
- The transfer of properties to the heirs and beneficiaries
If an individual has not created a will and named a personal representative, the court will appoint a personal representative responsible for collecting the assets and property deeds, paying off the deceased’s debts, and distributing the remaining properties or estates to the beneficiaries who have the legal right to inherit.
Probate is a court-supervised process taking several months to several years to finish. Most individuals prefer not to go through the lengthy probate process, and one way to do so is by establishing a revocable living trust.
How Does a Revocable Living Trust Help Avoid Probate
In order to avoid the probate process, an estate plan needs to contain some type of trust — typically a revocable living trust. When a trust is established, the individual’s real estate and personal property are transferred to the trust. As a result, when the owner passes away, there are few, if any, assets in the individual’s name; rather, the assets are held in the trust.
Rather than having to go through the probate process, the terms of the trust dictate what happens to the individual’s estate.
When the creator of the trust passes away (often called the grantor or trustor), the trust has a successor trustee named in the trust. The successor trustee’s role is to administer the trust and distribute the assets in the trust per the terms of the trust.
Revocable living trusts are a very popular estate planning tool because they allow you to avoid the probate process — making it simpler and easier on your beneficiaries or your children when you pass away to distribute your assets in a simpler, quicker, and much more private way.
Other Advantages of a Revocable Living Trust
Aside from avoiding the probate process, here are some other advantages of establishing a revocable living trust:
- The document details can be amended at the owner’s discretion
- Records and information are kept private after the owner’s death, as opposed to the probate process, which is considered public information
- Segregation of assets for married couples
- Specify distribution standards for minor children
- Delay the receipt for beneficiaries to the age of the owner’s choosing (rather than the beneficiaries receiving their full inheritance at age 18)
- Withdrawal limits can be set
- The funds can continue growing through multiple generations by using a professional trustee to manage the estate
If you are interested in setting up a revocable living trust to avoid the probate process, give us a call. We can help you create an estate plan so your children and beneficiaries won’t have to go through the probate process, and the distribution of your assets will follow the terms of your trust.