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Trusts and avoiding probate

A primary goal of estate planning for many people is to help their loved ones avoid having to deal with a long and potentially costly probate process after they die.

Thankfully, putting many of your assets in a revocable living trust can help you to accomplish that goal.

Because a living trust legally owns the assets that fund it, those assets don’t technically transfer to a grantor’s estate when they pass away. Instead, they can go directly to the designated beneficiaries without passing through probate.

What can you include in a revocable living trust?

There are a lot of misconceptions concerning revocable living trusts. People often think they’re only for people with considerable assets and that they take a lot of work to manage. However, if you own a home and have some non-retirement investment and bank accounts, as many people do, a revocable living trust can be worthwhile to establish.

You can also include other assets like jewelry, antiques and collectibles that don’t have ownership documents.

What happens to assets placed in a living trust?

Another common misconception is that it’s difficult to set up a living trust.

Nevertheless, once the trust is established it simply involves changing the name of an asset’s owner to the trust name (for example, “The Jane S. Doe Living Trust”). You can do this on the deed to your home and through your financial institutions for your accounts.

Finally, people often think they will have to give up access to an asset if it goes into a trust. With a revocable living trust, you would typically name yourself as the trustee. Furthermore, as trustee you can continue to transact on your accounts, sell your home if you choose and so forth just as you normally would.

What happens to the trust after you pass away?

You can also name a successor trustee who will take over as trustee when you pass away. At that point, the trust also becomes irrevocable, so changes to the trust can’t be made after your passing and it becomes the trustee’s job to see that the assets are handled as you have designated.

Needless to say, there’s a lot more to learn about revocable living trusts and other ways to keep your assets out of probate.

With experienced estate planning guidance, you can determine which approaches to estate planning are best for your needs and goals.

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