How does a revocable living trust avoid probate?
Because your property is in the name of your trust, and your trust-unlike you-cannot become incapacitated, it does not have to go through a guardianship process. Because your property is already titled in the name of, and owned by, your trust at your death, there is no need for the probate court to effectuate transfer of ownership from you, as the deceased, to your heirs. The trust merely continues on according to the instructions that determine its operation. It is specifically designed to function without bureaucratic red tape when its maker becomes disabled or dies. How important is it to have a revocable living trust if I become disabled? A major reason for having a revocable living trust, and one that many experts consider more important than avoiding probate, relates to your potential for becoming incapacitated. You are four to six times more likely to become incapacitated than you are to die in the next year. Therefore, it is important for you to plan for the possibility of your
A. Probate is a creature of the law and is the way the property of a deceased person transfers ownership. The law, however, recognizes a trust as being the owner of all property held by it, even though the original owner controls or can revoke the trust. In the eyes of the law, the decedent does not technically own the property and, as a result, it is not included in his estate for purposes of probate. Since the property avoids probate, it therefore avoids the attendant costs, delay and publicity. Q.
Regardless of the specific types of property that a decedent may have, all property will be either probate or non-probate property. Probate property is all the property that is personally owned by you and which must pass through the probate process. Trust property is legally owned by the trustee (though beneficially owned by the beneficiaries) and does not usually fall under the jurisdiction of the probate court.
Creating a revocable living trust is actually a two-step process. The first step is to have an attorney draft the legal document creating the trust. The second step is to transfer the legal title of assets into the name of the trust as the legal owner of the asset. Under the terms of a trust, the assets pass to the beneficiaries who are named under the terms of the trust, and not under the person s will. Thus the effect of establishing the trust and transferring assets into the trust is to remove those assets from the person s probate estate. The object is to carry out this process until all of the potential assets that would be transferred under a will otherwise have been removed from the estate, so that there is no probate estate. Q: What is the pour-over will? In connection with the revocable living trust, a special kind of will is drafted. Since the object is to eliminate all assets from the requirement of being probated, the focal point for asset distribution is now the revocable
