Last Updated October 29, 2017: Can a Trust Help Avoid Probate?
From our “Ask a Question” mailbag: Can a Trust Help Avoid Probate?
“I have been reading about trusts to avoid probate. Can a trust help my estate avoid probate?”
Many Trusts, Many Options.
Trusts come in all shapes and sizes and can help you meet many different goals. If your goal is to avoid probate, you could use a Revocable Living Trust. Furthermore, if your specific situation and assets are a good fit, you could use any number of different Irrevocable Trusts. Both categories can help your estate avoid probate.
Revocable vs. Irrevocable Trusts.
In general, a Revocable Living Trust is a tool used when you want to avoid probate but also want to control and use the assets in the trust during your lifetime. Because you maintain control and use, these assets remain available to pay your creditors and are subject to death taxes at your death.
But, if your goals are to avoid probate but also to provide asset protection and avoid death taxes, then you must use an Irrevocable Trust. There are so many different types of Irrevocable Trusts; I can only suggest the best fit after gathering more facts. For example, if you have a significant life insurance policy you wish to avoid the Federal Estate Tax, then the best fit is an Irrevocable Life Insurance Trust, sometimes called an ILIT. But, if your spouse and yourself wish to shelter assets other than life insurance, then a Spousal Lifetime Access Trust, or SLAT, might be a better fit.
How to Find the Best Trust.
After acting for over 20 years as an Estate Planning Attorney, I have found that matching a client to Trust that best fits requires a thorough review of assets. Further, a firm understanding of the client’s goals. Some techniques work wonderfully to reduce taxes but need the client to surrender complete control. Some clients just do not wish to give up this power. Once I have the background information, we then can brainstorm options to find the best fit.
Can a Trust Help Avoid Probate?
Yes. But, finding the trust that fits your specific situation takes some time.
In conclusion, in this Post, I tried to answer the question, “Can a Trust Help Avoid Probate?” So, let me know how I did. Comments and questions are welcome!
If you have any other questions about Estate Planning, Revocable Trusts or Irrevocable Trusts, feel free to contact our office for a free consultation with one of our Estate Planning Lawyers.
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Author, Peter Klenk, Esq.