The probate process can take a significant amount of time and money before any inheritances get distributed to a person’s beneficiaries. Additionally, probate filings, including wills, become part of the public record that anyone can access. As a result, many people wish to minimize or avoid the probate process as much as possible.
A standard will, however, does not avoid the probate process. The local probate court inventories, appraises, and certifies that debts and taxes on the property have been paid on any property covered by the will before the property is distributed.
The probate process also effects relatively small, modest estates. While small estates can get an expedited process, small estate probate cases still require public filings and court proceedings. Additionally, the upper limit for an expedited process can be fairly low. In Missouri, for example, an estate must be under $40,000 to qualify as a small estate.
A living trust is a way to avoid the probate process. A living trust is an instrument where the trustee manages trust property for the beneficiaries of the trust. Typically in a living trust, the trust creator is also the trustee, but instead of the property being in the individual’s name, the trust property is legally owned by the trust itself.
Upon the death of the trust creator/trustee management of the trust property automatically transfers to the named successor trustee to be managed according to the terms of the trust document without the involvement of the probate court. The catch is that the property must be owned by the trust before the death of the trust creator in order to avoid probate.
A common accompaniment to a living trust is what is known as a pour-over will. A pour-over will states that any property not in the trust gets directed to the person’s living trust. While pour-over wills still must go through the probate process, if there is little or no property left outside of the trust, then the probate process will be relatively painless. However, if a significant amount of property remains outside the trust, then probate can still take a significant amount of time, expenses, and effort. Individuals with living trusts should continually make sure that any newly acquired property is owned by the trust to avoid probate.
Individuals seeking a living trust should work with an experienced, local elder law attorney to help draft a living trust document that meets their individual needs. An elder law attorney can also help clients manage the living trust by working with the client to make sure that all of a client’s assets are properly titled to maximize the effectiveness of the living trust.
To discuss whether or not a living trust would be right for you, please call Martha C. Brown & Associates at (314) 962-0186.