avoid all the problems that probate can cause your family

By: Stuart Williams | Estate Planning Lawyer

What Trusts Are

A trust is a legal planning tool that can be used to easily transfer your most valuable assets to loved ones, and in a way that when used properly, will (1) avoid probate and (2) maximize the value of what you will leave to your family. Your jewelry, household items, real estate, life insurance, 401K (and anything else you own) can be placed into a trust.

How a Trust Works

Imagine that your trust is a box. But not just any old box, a magic box that can hold financial accounts and even expand to hold any asset you own. Your box can also be locked away for your family to inherit free from the claims of your beneficiaries' adult problems, and free of the time and outrageous expense a probate court distribution of assets would entail.

While you are alive, you hold the key to your magic box and nothing will change in regard to your usual abilities to use, control, and sell your assets. However someday when you die, a special person (that you get to choose), will "magically" (and automatically) receive the key from you.

Your special person (called a successor-trustee) will have the required legal authority to "unlock" your assets at your various financial institutions and insurance companies, as well as sell your real estate to distribute the proceeds to the rest of your family (if that's what you want to have happen). Your successor-trustee will then proceed to distribute your assets among the people you've chosen, and in accordance with the detailed instructions that you've created.

How Trusts Avoid "Probate"

"Probate" refers to the court process of transferring title of a deceased person's assets to his or her family. A deceased person's "probate estate" is comprised of each asset that needs to be transferred out of the name of the deceased person, and into the names of his or her beneficiaries. If the person who has died owns real estate and has financial assets that exceed $X00,000, probate could cost tens-of-thousands of dollars and take a year or longer to get through. For this reason alone, "avoiding probate" is a common estate planning goal.

Each piece of real estate, or financial asset placed into a person's trust, is an asset no longer "includeable" in their “probate estate.” When all of the trust creator’s assets are placed into their trust, the trust creator's "probate estate" is reduced to nothing, and "probate" is avoided.

A Word of Caution

Not all trusts are created equally. Many lawyers don't practice enough in the area of estate planning to know the difference between planning that will avoid probate and planning that won't, or for that matter how to plan for people that you love and care about.

At Family Wills & Trusts PLC, we’ll make sure there are no gaps in your estate plan that would leave you and your family exposed to unnecessary financial waste, headaches, or the stresses of probate. Request free information or schedule an appointment below to see how you can benefit from working with us.