Probate is a process by which a court oversees the distribution of an estate because the deceased person did not have an estate plan, or some assets were not accounted for in an estate plan, and is often expensive and time-consuming. If you have a trust, however, it could keep your estate from going through probate. In fact, if you have a trust alongside a General Transfer Document and Pour-Over Will, you’ll likely be able to avoid it entirely. In order to give your estate its best chances at avoiding probate, however, your trust has to remain funded correctly.
When a person sets up a trust, they’re known as a settlor. They create a trust, which is an agreement between themselves and the trustee, who is the person who will manage those assets. In some cases, the settlor may also be the trustee. The trustee agrees to manage the assets of the trust in the best interest of the beneficiary, the person who “benefits” from the assets (hence the name). The trust will also outline how the trust will be administered, and the powers the trustee has. Each time you acquire a new asset, you must ensure that the asset is properly tilted to the trust to legally transfer that property to the possession of the trustee. Without transferring new property or assets into the trust, those assets will not be in the control of the trustee, and so probate could become necessary. In order to avoid this, it’s important to make sure that your trust is fully funded. “Funding” a trust is simply the process of transferring assets into the possession of the trustee.
A General Transfer Document and Pour-Over Will can also help prevent your estate from entering probate. They both serve the same general purpose, which is to specify that you intend for all assets, no matter where they are situated and when they are acquired, to be transferred into the trust. While documents can then be used in conjunction with a Heggstad petition to transfer any remaining assets to your trust after death, this process is not guaranteed, and it still means the court will be involved. So, it’s still crucial that you keep your trust funded.
While keeping your trust fully funded may sound like a simple task, it can quickly become complicated if you have a lot of property in your name or if you’re dealing with several different assets and accounts. You can also incur taxes if the funding is done improperly. That’s why it’s important to work with a trust attorney who can help you plan and fund your trust the right way. If you do this, you’ll be able to avoid probate and keep your estate and beneficiaries safe from unnecessary expenses. To get started with your own estate plan, or update your existing one, contact the Law Offices of Tyler Q. Dahl today.
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