Most people want their money and assets to be passed down to their children and other individuals that are important to them – instead of having their belongings go down the drain in the courtroom via probate.
Probate involves taking inventory of all property and assets and appraising those assets in order to pay debts and taxes incurred by the estate. After doing that, the remaining funds are distributed to the beneficiaries. Probate is a very costly and time-consuming process. If possible, you will want to avoid it if you can.
Related Article: What Types of Assets Are Subject to Probate?
How do you dodge probate?
The answer is by forming a living trust.
With a living trust, property can avoid the probate process and will quickly, efficiently, and with no fees pass assets and property to the beneficiaries that you have named – without the hassle and expenses of probate court proceedings. Additionally, a transfer of assets occurs in private since there are no open court proceedings, and a separate tax return will not be required specifically for the trust.
When a person forms a living trust, they are able to include all of their property and assets. The revocable living trust becomes the owner of everything held within the trust, and the person who formed the trust maintains control over the assets and property in the name of the trust. They are designated as the trustee.
According to LegalNature, when the trust is formed, it designates beneficiaries, which generally are the children or other loved ones of the person who formed the trust. If something should happen to the person who formed the trust, all the assets transfer to the beneficiaries. When the trust maker becomes incapacitated, the trust appoints another person to act as the trustee in their absence, and that individual or legal firm assumes the responsibilities of administering the trust.
Have more questions regarding probate?
Marcia L. Campbell, CPA is committed to helping each client plan for the personal and financial decisions that need to be made for the future. Marcia’s team has a genuine interest in your well-being and a well-established list of services to help guide you through this process.
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