The probate system accomplishes four goals:

1) it provides for the management of the decedent's assets;

2) it makes sure that the decedent's bills are paid,

3) it authorizes final tax return filing, and

4) it makes sure that the net assets are distributed either according to the decedent's Will or the Statute of Descent and Distribution.

The probate system is based on lack of trust, so there is close supervision of the fiduciary to avoid abuse, and bonding requirements to secure beneficiaries against malfeasance by the fiduciary. An alternative to the Will (and the probate system) is the funded living trust. Because the trust is based on a trusting relationship between the settlor and the trustee, there is little or no supervision of the trustee by the probate court.

There are usually four reasons to make a trust: 1) to avoid or minimize Probate expenses, 2) to minimize Federal Estate Taxes, 3) to provide for the efficient control of your assets after your death and during any time when you are disabled or otherwise unable to control your assets (i.e.: an extended vacation or business trip), and 4) to assure the privacy of your estate plan (the probate system is open to the public). A properly established trust arrangement can accomplish these goals.

A trust can be made to control assets during a person's lifetime (a Living Trust), or it can be made to only control assets after a person dies (a Testamentary Trust). A trust can be either revocable or irrevocable, which means that some trusts can be changed or terminated during your lifetime, others cannot be changed or terminated.

Probate expenses (primarily attorney fees and possibly fiduciary fees, together with court costs and other administrative expenses) apply to every estate administered in the Probate Court system. It is usually possible to reduce the costs of managing and transferring your property by use of a Living Revocable Trust. Even with a trust it is still necessary for the trustee to manage property, pay the decedent's final bills, file the final tax returns, and transfer the remaining assets.

A typical testamentary trust is used to extend the guardianship of a minor child's estate after the child attains the age of 18 years. Many people do not want their children to have the uncontrolled access to their inheritance at age 18 if the parents have died. Therefore we insert a simple trust in the parents' Wills causing the child's inheritance to be delivered to a Trustee until the child attains a specified age. Most people do this because the initial cost for the Testamentary Trust Will is lower than a Living Trust, although the ultimate costs will probably be higher because of the necessity for probate administration of the assets controlled by the Will which establishes the trust.

For most people who choose a trust arrangement, the most common is a Revocable Living Trust. It will probably reduce administration expenses, makes your estate plan private (rather than a matter available to public scrutiny), and may avoid or minimize Federal Estate Taxes (if properly done). It can also parallel the function of a durable Power of Attorney to provide for the management of your assets during your lifetime.

WARNING! Merely signing a trust instrument and a "pour-over" Will does not avoid the probate system! It is necessary to transfer your assets to the Trust in order to avoid probate!

Our office is now able to provide you with a computer-assisted evaluation of the costs and benefits of your present estate plan (or "non-plan") and the various options available to you. Evaluations by appointment only.

WARNING: The foregoing information is presented for general illustration purposes only, and is NOT necessarily complete nor is it intended to be relied on as legal advice. Each person's estate needs to be planned on an individual basis!