When it comes to the distribution of assets, a trust is a good option to ensure that assets go where they are intended to. Typically, trusts do not have to go through probate – but what about living trusts? Learn more details about living trusts and when it does or does not go through probate.
Trusts: The Basics
A trust is a legal document in which a trustee is appointed to manage assets for the trust creator (trustor) while they are incapacitated or after they die. A trust can also be created to manage the trust assets while the trustor is still alive – otherwise known as a living trust.
A trust can be either revocable or irrevocable. Revocable trusts are legal documents in which the terms can be altered at any time by the trustor. An irrevocable trust cannot be altered once it is in effect, typically occurring after the trustor has passed. A living trust may be altered and is considered revocable.
Related Article: Is Probate Needed if There is a Will?
Reasons a Living Trust Goes Through Probate
If you want to avoid probate, you may create a living trust and use a pour-over will. A pour-over will is a legal document that transfers an individual’s assets into a previously established trust upon the trustor’s death. Normally, it is used for assets that were not titled in the trusts name to pour it over into trust.
In general, if a beneficiary does not agree with the distribution of assets from the living trust, they can go to probate court to contest it. The probate process helps the beneficiary explain the situation to the judge and make a decision about who gets the assets.
Related Article: How to Avoid Probate With Living Trusts
Speak with a Professional Fiduciary
A living trust is an option for those who want the ability to alter terms of the trust while they are living. Trustors may also want to avoid their trust going through probate after they pass away. If you need guidance, contact a professional who specializes in probate to ensure that your trust is managed outside of court.
Do you have a question about trusts or probate? Schedule time with Marcia L. Campbell, CPA.
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As the most experienced CPA in the Inland Empire who specializes in working with seniors, Marcia L. Campbell is committed to helping each client thrive by caring for their personal and financial wellbeing with genuine interest, well-established expertise, and a focus on respectful partnerships. Marcia’s team specializes in a number of services, including elder & financial care, court & trust accountings, as well as private fiduciary and tax services. At Marcia L. Campbell, CPA, we understand the importance of our clients’ individual needs and are committed to helping them make the best personal and financial decisions for their future.