Avoiding Probate with Trusts
This playbook outlines the steps to set up trusts that enable estate assets to bypass the probate process. By establishing the right type of trust, beneficiaries can access assets more quickly and privately.
Step 1: Research Trusts
Begin by researching the different types of trusts, such as revocable and irrevocable trusts, and how they operate to avoid probate. Understand their benefits and limitations.
Step 2: Inventory Assets
Create a complete inventory of your assets, including real estate, bank accounts, investments, and other personal property, to determine what will be placed into the trust.
Step 3: Consult Professionals
Seek advice from estate planning attorneys and financial advisors to determine the most appropriate type of trust for your situation and to ensure it is established correctly.
Step 4: Draft Trust Document
Work with an attorney to draft the trust document, which will outline the terms of the trust, the trustee’s responsibilities, and the beneficiaries' rights.
Step 5: Fund the Trust
Transfer the ownership of your assets into the trust. This may include changing titles and deeds, altering beneficiary designations, and other necessary paperwork.
Step 6: Maintain Trust
Conduct regular reviews and maintenance of your trust, updating it as necessary to reflect changes in assets, beneficiaries, or personal circumstances.
General Notes
Tax Considerations
Consult with a tax advisor about the potential tax implications of establishing and funding a trust, as this can vary greatly depending on the type of trust and assets involved.
State Laws
Be aware that trust and probate laws can vary significantly by state. Ensure that you're following regulations applicable in the state where the trust is established.