Regarding estate planning, trusts stand as powerful tools that offer individuals and families a way to safeguard their assets, streamline inheritance processes and oversee the seamless transfer of wealth from one generation to the next.
Trusts, when structured and executed properly, have the remarkable ability to bypass the probate process.
This applies to both revocable trusts (also known as living trusts) which you can change during your lifetime and irrevocable trusts which you cannot alter once made.
How trusts bypass probate
When assets are placed in a trust, they cease to be part of the grantor’s estate. As a result, these assets do not need to go through the probate process. This is because the trust document already outlines how they should be distributed.
Probate proceedings are public, meaning anyone can access the records and details of the deceased’s assets and beneficiaries. On the other hand, trusts offer privacy, as they are not subject to public disclosure. This privacy can be especially appealing to those who value confidentiality.
Probate can be expensive, with court fees, legal expenses and executor fees. Individuals can reduce or even eliminate these costs by utilizing a trust, helping ensure that more of their assets are passed on to their intended beneficiaries.
Trusts are powerful tools in estate planning, offering a reliable means of bypassing the probate process. For a trust to be valid it must meet the legal requirement. It is best to consult a qualified professional who can tailor a trust strategy to meet your specific needs.