Trust Formation - Avoiding Probate
There are different motives for setting up a trust but one of those is to avoid probate. This is a major concern for many people as they plan their estate. If you want your personal affairs to remain private, this is the best way to do that. With a trust in place and other estate documents completed, your estate won’t become involved in a court-supervised probate process after your death and your wishes will be honored as you have record them.
A revocable trust is created by writing a trust agreement. That agreement will involve at least three main parties including the trust maker (also called the grantor), the trustee, and the beneficiary. Often couples act as all three and this can be ideal, depending on your situation. Funding the trust will require transferring assets into its ownership instead of holding them personally.
The trust owner(s) can become the trustee(s), and can then manage, invest, and spend the trust’s property for their benefit as a beneficiary. Through a trust, those Trustees are allowed access to their current assets as needed but it is important to remember that although the trustees manage the trust, they no longer own the assets contained in it. After the death of the original trustees, the trust generally becomes irrevocable and those named as following beneficiaries will inherit what is in the trust at that time.
Property left outside the trust requires probate so it’s important to regularly review trust documents to be sure you have included everything you want. An attorney can set up the original trust documents as well as provide you with a review and any updated documents as needed.