If you have heard of a revocable living trust before, now is a good time to go back over what it is and how it could help your family avoid probate if you pass away. A revocable living trust allows you to make changes to the trust during your lifetime. It offers you a way to assign assets to beneficiaries, and it makes it so that your loved ones won’t have to go through the long, tedious probate process after your death.
A revocable trust is created in a trust agreement. This document will name you, a beneficiary and the trustee. Your job is to fund the trust, and then the trustee manages it until it can be paid out to your beneficiary.
You won’t have probate with a good trust
A well-designed revocable living trust will help your loved ones avoid probate by taking assets out of your estate. The assets will be placed into the hands of a third party, and that third party, the trustee, will then pass them on directly to your beneficiaries as required by the trust arrangement.
Since the property is no longer in your name, you technically no longer own it once it’s in the revocable trust. This means that the property also won’t be part of your estate when you pass away, and this will allow it to pass freely to your beneficiaries outside of court.
What can you put into your revocable trust?
Trusts can collect all kinds of assets ranging from your life insurance proceeds and retirement accounts to other financial sources. These will be passed on to your beneficiaries without probate court so long as they are assigned correctly.
Does a trust ever have to go into probate?
Not usually. Instead, what tends to happen is that there are assets that did not get transferred into the trust that end up having to be probated. This is something that you should talk about with your attorney so that you can update your trust regularly and minimize the number of assets that are held outside of the trust prior to your death.