Avoiding Probate with a Trust
If you haven’t heard yet - probate is difficult and expensive. Probate can take a year or more to settle with probate fees sometimes charged as a percentage of the assets. The standard estate plan seeks to avoid probate by establishing a living trust. A trust is usually drawn up by a lawyer, and has a number of benefits:
- avoids probates fees and delays
- privacy (probate records are public)
- usually coupled with living will or other documents to provide for incapacity or disability
Usually the grantor (the person who sets up the trust) retains all control, by becoming the trustee or person in charge of the trust’s assets. Their are successor trustee/s named in succession in the trust document, who are responsible for managing the trusts assets after the death of the original trustee. It is common for the successor trustee to also be the executor of the estate. In some large estates, a professional successor trustee is selected rather than using a family member or trusted friend.When the grantor passes away, the successor trustee takes over the assets in the trust and distributes them to the beneficiaries named in the trust. This transfer of assets does not usually involve legal fees or court costs. When all the property held in the trust is distributed, the trust automatically terminates. Trusts do not normally change the tax consequences of inheritance.