Because
of the high costs and delays associated with the probate
process, a number of mechanisms have been adopted as means
to keep property outside of the probate process. The probate
process only applies to assets that are titled only in
your name individually. The probate process does not cover
assets held in joint names or assets that you have contributed
to a trust. For this reason, the primary ways to avoid
probate are to contribute assets to a trust or to retitle
assets so that they pass by operation of law and not under
the terms of a will or the laws of intestacy.
Perhaps
the most successful and widely used mechanism for avoiding
probate is the use of a living trust. A living trust permits
you to quickly transfer assets according to your wishes
and avoids the delays associated with the probate process.
A
living trust must be properly drafted in compliance
iwth state and federal laws and in a way that helps
minimize income and estate tax consequences. Property
is then transferred into the name of the estate during
life. The grantor will normally act as the trustee
of the living trust during the grantor's life. In
this way, the grantor continues to make decisions
relative to the poroperty transferred to the trust
during the grantor's lifetime.
At
death, the successor trustee take over as trustee
of the estate. The property that is placed in
the trust transfers under the terms of the trust
and not through the probate process. Beneficiary
access to the cash and property in the estate
is much more immediate than is available through
the probate process. The process is also normally
much less constly than probate.
At
the time of death, the trust is no longer revoacable.
A successor trustee takes over making decisions under
the terms of the trust. The terms of the trust will provide
for the disposition of assets of the estate to the beneficiaries
as described by the grantor. The successor trustee is
normally responsible to assure that the distributions
are made as provided in the trust terms.
Our
free2estateplan E-Book series will take you step by
step through the various decision that you need to make
in implimenting and funding a living trust. We also
include a template document system which will automatically
personalize your living trust documents. Our packages
also include instructions for transfering assets into
the trust and several documents that will be helpful
in transfering your assets to the trust.
