A lot of people creating an estate plan choose to create a revocable living trust primarily because the trust allows them to minimize the size of their probate estate. But what is a probate estate, and why would you want to minimize it? Here’s what you need to know about probate, probate estates, and how living trusts enter into the equation.
The Property You Leave Behind
Everything you own after you die must go to new owners. The probate process is the legal process that allows this property transfer to happen. Once all of your property has been inventoried and all of your debts have been paid, the remaining property will go to your heirs. This process can take quite a long time and, because someone has to manage the process, can cost a significant amount of money.
The Property in Probate
While all of your property will have to be transferred to new owners, not all of it will have to go through probate. Property that you own jointly with someone else, property that has named beneficiaries, and property that is owned by a revocable living trust can avoid the probate process.
Transferring Through a Trust
Whenever you create a revocable living trust, you can transfer all of your property to it and then choose how the trust will distribute that property after you die. This process completely avoids probate, making it far more efficient and cost-effective than the regular probate process. Living trusts also make this process private, whereas the probate process is open to the public.
If you’d like to know more about probate and other legacy wealth planning issues, you can attend our next free Legacy Wealth Planning Workshop. Seating is limited, so contact our office for registration details.