For many people creating an estate plan, avoiding probate is a major goal. Having your assets transfer to new owners after you die without the requirement of going through probate can save your estate a lot of time and money. It can also offer you the opportunity to keep your affairs entirely private as probate documents are part of the public record and anything that goes on in a probate court will be open to public inspection. As part of an estate plan designed to keep your estate private, a living trust can be a very useful tool that you may want to consider.
Probate Avoidance
In order to properly use a living trust to avoid probate you must ensure that the trust is properly funded. This means that the trust itself must own all your property at the time of your death. If you have anything left over, this property will have to go before probate court before new owners can take possession. However, some assets, such as life insurance policies or transfer on death accounts, avoid probate even if you don’t have a living trust, so not all assets will have to be owned by the trust.
Other Documents
Though you may wish to avoid probate entirely, this is not usually necessary or possible. A living trust is not the only estate planning document you need, and you will probably need to create what is known as a “pour over” Will to accompany the trust. A pour over Will is a Last Will and Testament that directs any property you own at the time of your death to be transferred to the trust. Like all Wills, the pour over Will must be approved by a probate court.
