Can You Avoid Probate Using a Revocable Living Trust?

The short answer is ‘yes’, a revocable living trust can be used to avoid probate. Assets from the trust are transferred from your name into the trust and then distributed to beneficiaries upon your passing. In this article, the Virginia Beach wills and trusts attorneys at the Law Office of Angela N. Manz will discuss how to use a revocable living trust to avoid probate.

How does a revocable living trust help avoid probate? 

Essentially, a revocable living trust avoids the legal process of probate. During probate, a judge will look over the will and distribute the assets to your heirs—but only after your creditors have been notified. When you place assets in a revocable trust, you are basically naming the trust as the owner of the assets. This allows you to bypass probate entirely and distribute assets directly to your heirs.

Distributing assets through a trust is considerably faster and more efficient than using your will. When assets are held in a revocable trust, they don’t go through probate at all. Instead, they’re transferred directly to heirs, which leads to a more expedient and efficient transfer.

Trusts also preserve your privacy. Unlike wills, which become a matter of public record during probate, the details of a revocable living trust remain confidential. This means that information concerning assets and beneficiaries will not be disclosed to the public. This is appealing for those who value discretion in their financial affairs.

For those who own property in multiple states, a trust eliminates the need for multiple probates. A revocable trust can consolidate ownership, thereby avoiding the necessity of separate probate proceedings in each state where the assets are located.

Funding the trust

For the revocable living trust to be effective, you must transfer your assets into the trust. A trust is basically a container for assets. The assets are titled in the name of the trust. Assets that are not properly titled in the trust will likely pass through probate.

It’s still necessary to have a will

 You can place a provision in your will that stipulates that all assets not titled in a trust “pour over” into the trust after you pass. The will acts as a sort of safety net, transferring any overlooked assets into the trust. In addition, you can only name guardians for minor children within a will, so it’s still important to have a will even if you create a trust.

No creditor or tax protection 

Revocable living trusts don’t offer creditor or tax protection. Instead, assets held within the trust are still considered a part of your estate and thus taxable and accessible to creditors. An irrevocable living trust, on the other hand, can be used to shield your assets from creditors.

The bottom line 

Revocable living trusts are valuable estate planning tools that streamline the distribution of your assets and avoid probate entirely. Revocable trusts are especially beneficial to those with large or complex estates to manage. Nonetheless, it’s important to understand the trust’s limitations and prepare accordingly.

Talk to a Virginia Beach Estate Planning Lawyer Today 

The Law Office of Angela N. Manz represents the interests of those who are looking for estate planning services. Call our Virginia Beach estate planning lawyers today to schedule an appointment, and we can begin discussing your next steps right away.