When you do your estate planning, you want to make it as easy as possible for your heirs to gain access to their inheritance once you have passed. You also want them to be able to skip the probate process when possible.
Fortunately, a revocable living trust can help you do just that. Here’s how it works:
What does it mean to avoid probate?
When you, as the trust-maker, establish and fund a trust with assets, those assets are taken out of your name and put into the trust. Real estate properties can also be under trust ownership. During your lifetime, as trustee, you will have access to manage the funds. You name the trustee who will succeed you and assume your duties upon your death.
This trustee will then control and manage your business interests placed in the trust, as well as your investment and bank accounts in the trust. They can access proceeds from any life insurance policies and disburse the funds to designated beneficiaries.
Your successor trustee also has an obligation to settle any bills, taxes and debts that are valid and outstanding at the time of your death. Once all of your debts are settled, your trust assets skip the probate process and pass directly to your beneficiaries with no court action required.
Your privacy is preserved when probate is unnecessary
Assets that go through probate are not protected from prying eyes. Because probate matters are public records, anyone with the inclination can access them. Trusts provide a veil of privacy to avoid this transparency.
Learn more about trusts
Depending on your circumstances, a trust can be an excellent vehicle to consider when you begin the estate planning process. Learning about the ins and outs of a trust can inform your decision.