A revocable trust is named so because it can be easily altered, amended, or, of course, revoked. This flexibility is one of the many appealing features of a revocable trust and its benefits make it an attractive addition to many estate plans. To establish a revocable trust, the trust settlor, or grantor, creates the trust and funds it. The trust is then managed by the trustee for the benefit of the trust beneficiaries and in accordance with the terms set forth in the governing trust document. One of the key benefits of a revocable trust is that it will avoid probate. There are, however, some critical things you need to be aware of in order for use of a revocable trust to be an effective probate avoidance strategy.
Can I Avoid Probate by Using a Revocable Trust?
It makes complete sense that someone would want to avoid probate in whole or in part. It is a lengthy process and one that can be frustratingly slow, particularly in the wake of a loved one’s death. The delay means that heirs of the estate will likely have to wait some time before receiving any sign of an inheritance. Furthermore, probate can be expensive as court fees and other legal fees add up quickly.
Using a revocable trust can be an effective way at avoiding probate, but the key here is that the revocable trust must be properly funded. Assets held in the trust will avoid probate because they will be owned under the trust name. As the assets are technically owned by the trust, and not the decedent, the assets will pass outside of the probate process and to the trust beneficiaries according to the trust document.
So, in order for probate to be effectively avoided, a revocable trust must be properly funded. Any assets you wish to be held in trust and pass outside of probate must have been transferred in ownership to the trust itself. A variety of assets can be held in the trust. This includes real property, securities such as stocks and more, and financial accounts such as savings accounts. Ownership of the asset, however, must pass to the trust or this estate planning strategy to avoid probate will not be effective.
When properly employed, using a revocable trust is an effective way to avoid probate. There are also other probate avoiding strategies that you may also want to use so that the bulk of what would otherwise be your probate estate actually ends up circumventing the probate process. You can designate certain accounts as payable on death and name a beneficiary that will gain immediate access to the account upon your death, without the need of waiting for probate. This is commonly done with things like bank accounts.
Florida Estate Planning Attorney
For more strategies to strengthen your estate plan, talk to the knowledgeable team at Verras Law about your options. Contact Verras Law today.