Living Trust

What Is A Living Trust Probate?

One of the major reasons why many resort to having living trusts is that they believe they will be avoiding the arduous and tedious process of a probate, compared to a will.

For starters, probate is the legal process that settles the estate of a deceased person, primarily to resolve all possible claims, whether it is tax or debt-related. Essentially, probate involves the inventory and appraisal of a person's estate, initially to settle any possible legal encumbrances or liabilities, before the remainder of the estate is distributed to specified heirs.

A living trust is a valid legal arrangement executed by a 'grantor' (the person who initiates the living trust) and they are executed during the lifetime of the grantor (also known as a trustor). Estates or properties that are included in the living trust normally do not go through the process of probate. A living trust is usually a revocable arrangement that will allow the grantor to convey or assign his estate to a grantee or trustee to manage the estate, which may be distributed to beneficiaries that are stated in the living trust document in the event of a grantor's death.

The living trust can be cancelled by the grantor anytime he so wishes since it can be revocable. It allows the grantor control of the distribution of his estate covered in the living trust, as it involves transferring the ownership of properties and assets into the trust, where a trustee is then named to manage the trust. The trustee can be anybody of your choice, be it a person, a group of persons or an institution - the grantor can also be named as the trustee, just as long as a successor trustee is assigned to distribute the estate upon in the event of death of the grantor.

Apparently the big advantage of a living trust is that - as long as it is properly drafted - it generally avoids any living trust probate proceedings, since the trust will own the asset and not the deceased grantor, since the estate is held 'in trust'. But once improperly drafted or executed, the estate covered in the living trust may be subject to living trust probate, reason being that if the estate is still under the grantor's name, the state is duty-bound to conduct probate to settle tax or debt-related liabilities of the deceased.

Simply put, a living trust is not ideally probated since the grantor no longer owns the assets transferred once it is included in the trust arrangement, depending on state regulations governing living trusts.

A living trust is different from a will, since a will dictates how an estate is distributed after the death of the executor. If a person dies and does not have a will, the person is considered intestate and the state law will determine through a probate process what it will do with the estate and distribute the rest to the deceased's heirs.

Ideally, a living trust is not a cure-all for a cost efficient estate planning or a way out of a lengthy or costly living trust probate process. But since it does have its advantages it is a practical way to ensure that your assets or properties are handled correctly. Just make sure that one needs to have sound and wise advise from knowledgeable and licensed persons on living trusts to ensure better protection of one's estate.