Do you have an estate plan in place? Have you included a revocable trust to take advantage of the potential creditor protection it can offer beneficiaries as well as being a way to avoid probate? That’s right. A revocable trust can be used as one strategy to avoid probate. This can be great news to hear considering how complicated and lengthy the probate process can be. Heirs of an estate have to wait for the probate process to wrap up in order to receive any inheritance. It can be quite a lengthy wait. Furthermore, probate can be expensive! Think of the court fees and legal fees that can pile up along the way. So, probate avoidance can be a big benefit of establishing a revocable trust. To reap this benefit, however, it must be properly executed.
Will My Revocable Trust Avoid Probate?
In order to set up a revocable trust, the trust settlor creates the trust. An appointment of trustees is made and the trustee is tasked with managing the trust to the benefit of the trust beneficiaries. A successor trustee can also be named to take over trust management in the event that the trustee is no longer able or willing to serve as trustee. The trust must be funded.
This last step, the funding of the trust, is critical. Without proper funding, the trust will fail to operate as the trustor intended. There will be no probate avoidance and the revocable trust will, essentially, be useless. In order for your revocable trust to actually avoid probate, it must be properly funded. Otherwise, there will be nothing in there to be probated or avoid probate at all!
To fund a trust, ownership of an asset must be transferred to the trust. If you own a piece of real property that you want to hold in the trust, then the property must be retitled from you as the owner to the trust as the owner. A variety of other property types can also be used to fund a trust. You can fund a trust with a bank account, securities such as stocks and bonds, and other property types. The essential thing is that ownership of the asset be properly transferred to that of the trust. The reason why assets held in a revocable trust end up avoiding probate is, after all, that they are considered to be owned by the trust and not be the decedent. Thus, when the decedent’s estate is probated, the assets held under the ownership of a revocable trust are not included.
Estate Planning Attorney
A revocable trust is among one of the many valuable estate planning tools that you can use to strengthen your estate plan and gain a variety of other benefits as well. For assistance in developing a solid, comprehensive estate plan, Monk law is here for you. We can counsel you on your options and even discuss other ways you can help your assets avoid probate. Contact Monk Law today.