Death Probate (importance of a properly funded Trust)

Will based planning forces your estate to go through Probate.

One of the biggest points used to "sell" trusts is the avoidance of probate. Though this is true if everything is done properly, there is a trap for the unwary.

The idea of creating a trust is creating a new entity and transferring all of your "stuff" into it. (This is called "funding" the trust). What happens if you don’t properly fund your trust? Whatever your estate owns when you die that does not automatically pass to someone else by contract must pass on under the scrutiny and control of the probate court.

Therefore, it is essential to work with an attorney who will not only properly counsel you and properly draft documents that meet your goals, but who will also make sure that your trust is properly funded and maintained.

Most attorneys will create a safety net of sorts called a "Pour-Over-Will." A Pour-Over-Will replaces any current Will you have and places all of your property in trust upon your death. While this helps assure that your wishes are met as outlined in your trust, it may still be necessary to use the probate Court to transfer some assets to trust if they have not already been properly funded to the trust during your life.

A properly drafted and properly maintained trust based plan will avoid probate entirely. However, it may still be appropriate for your attorney to take some limited probate actions to start a "statute of limitations" running regarding the creditors of your estate. This will be largely state law specific.

Though the expense and delay of probate may at times be exaggerated by advisors, stereotypically avoiding probate still saves both money and time. In fact, in some cases the exaggerated reports are accurate and avoiding probate will avoid huge time delays and exorbitant additional expense. It is all determined case by case. Unfortunately, know one can tell what type of case yours will be until you pass on.