Funding your Revocable Trust to Avoid Probate
Upon death, your individually held assets (assets that are not held jointly and do not have a beneficiary designation) pass through your Will to your named beneficiaries. If you have no Will, such assets pass by the laws of intestacy. Either way, your estate would need to go through a process in the Probate Court known as “probate”. The probate process requires newspaper notices, an appointment of a Personal Representative, letters to heirs, and a statutory waiting period, all of which can be quite costly and time-consuming. The records of your Estate, including your Will, if any, and often an Inventory of your assets, become part of the public record.
A Revocable Trust is an estate planning tool that, among other things, allows you to avoid the probate process while maintaining control of your assets. During your lifetime, you can transfer title of your assets to the name of your Revocable Trust. You, as Trustee, would have complete control over all trust property, just as you did when the assets were in your individual name. You can pay expenses, make gifts, take out a mortgage, or do anything else associated with owning and enjoying property. During your lifetime, your Revocable Trust is not a separate tax paying entity for income tax purposes, and all income earned on Trust-owned assets would be reported on your own individual income tax return.
Upon death, your successor Trustee would be able to distribute Trust assets to beneficiaries of your choice in accordance with the terms of your Trust without any court involvement.
By funding your Revocable Trust during your life, you avoid the onerous and expensive probate process, and simplify and expedite the process of transferring assets upon death.
Material presented on the King & Navins, P.C. website is intended for information purposes only. It should not be construed as legal advice or the formation of an attorney-client relationship. Please consult an attorney for individual advice regarding your own personal situation.