In planning for non-taxable estates, one of the client’s most important goals (after distribution provisions are drafted) is to avoid probate, and this is usually achieved by utilizing a Revocable Trust as the client’s main estate planning document.  The Trust will control where the client’s estate goes after the client passes, and if properly funded, will help avoid the necessity of probate for the client’s estate.  However, it is important not to simply assume that signing a trust is all that is required to avoid probate.

The need for the the probate process arises when a client dies having owned assets (whether real estate, checking or savings accounts, investment accounts, stocks and bonds, etc.) during life in his or her name individually.  After the client passes, the client’s estate becomes the temporary owner of those assets, the the probate process is the process of the court-assisted transfer of those assets to the new owners (the beneficiaries of the client’s estate).  The probate process can be time consuming and expensive, and can delay the beneficiaries’ receipt of the assets.  This is what many clients are trying to avoid when they establish a revocable Trust.

When a client signs his or her Trust, the Trust becomes a separate entity apart from the client. Often, the client is completely in charge of the Trust during life (as Trustee) and if the client becomes sick or incapacitated, someone else takes over as Trustee.  When the client passes away, the Trust still exists, and the Trust is still the owner of any assets transferred to the trust during the client’s life.  However, if the client does not transfer any of the assets into the name of the Trust while he or she is alive, then the probate process is triggered in order to transfer the assets from the estate to the name of the Trust, for further distribution thereafter.

Simply establishing a Revocable Trust will not work to avoid probate.   The client must transfer accounts, stocks, real estate, and other transferable assets into the name of the client’s trust during life in order for probate to be unnecessary.  If you have any questions regarding whether your estate will need to be probated, what can be done to avoid it, or for any other estate planning questions, please do not hesitate to contact our office: (772) 234-5500, bhorner@rlloydlaw.com.