For most people, a Last Will and Testament is the first estate planning document they create. That same Will may continue to serve as the foundation of their estate plan for many years to come. If your Will remains the cornerstone of your estate plan, it might be time to consider another option if probate avoidance is important to you. A trust can accomplish most of the same goals as a Will while also offering a number of additional estate planning benefits, including probate avoidance. The trust lawyers at Nash Bean Ford & Brown, LLP explain how a trust can help your estate avoid probate as well as explain some of the other benefits to including a trust in your estate plan.
The Problem with Probate
Most people leave behind an estate when they die. That estate consists of all assets, both tangible and intangible, owned by the decedent at the time of death. Probate is the legal process by which those assets are identified, located, valued, and eventually distributed to the intended beneficiaries and/or legal heirs of the estate. Creditors of the estate are also notified and provided an opportunity to file claims during the probate process. While that may sound simple enough, the probate of even a relatively modest estate without complex assets can take months to complete. If the estate is valuable, includes complex assets, and/or becomes involved in litigation, the probate process can drag on for years. Assets that are part of the probate process remain in limbo until the process is complete, meaning the intended beneficiaries cannot make use of the assets or otherwise benefit from the intended gift until probate is complete. Assets that are gifted in your Last Will and Testament become part of the probate process because your Will must go through probate.
How Can a Trust Help?
A trust is created by a “Settlor” who appoints someone to be the Trustee of the trust. The Trustee is the individual who manages and invests trust assets as well as oversees the administration of the trust according to the trust terms created by the Settlor. Assets held in the trust are distributed by the Trustee according to the terms of the trust. When used to distribute estate assets after the death of a Settlor, the trust terms will tell the Trustee when to distribute assets and which assets to distribute to which beneficiaries. A trust can be used in lieu of a Will to distribute your estate assets; however, it is best to keep at least a Pour Over Will as part of your comprehensive estate plan even if you plan to rely primarily on the trust.
If avoiding probate is your goal, the benefit to using a trust is simple. Assets held in a trust bypass the probate process altogether. As such, trust assets can be distributed immediately after your death to the named beneficiaries according to the terms you created as the Settlor. Not only can you rest assured that loved ones will have quick access to much needed assets, but using a trust as your primary estate planning document offers additional benefits as well, including:
- Privacy – because a Will is submitted to the court for probate the terms of your Will become public record, unlike a trust which remains private.
- Flexibility – a trust can also accomplish a wide range of additional estate planning objectives, due in large part to the fact that there are numerous different types of trusts.
- Incapacity planning – your Will only activates upon your death, whereas the terms of a trust can kick in if you become incapacitated as well.
- Protection for a minor child’s inheritance – a minor cannot inherit directly from your estate. If you have children, or plan to have them in the future, a trust can protect and grow your child’s inheritance until the child is old enough to inherit the trust assets directly at which point they can continue to remain in the trust or be distributed according to the terms you created.
Contact Nash Bean Ford & Brown Trust Lawyers
For additional information, please join us for an upcoming FREE seminar. If you have questions or concerns regarding how a trust can help your estate avoid probate, contact the experienced trust attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.