Video Summary
Will you avoid probate with a trust? The answer is if it is properly executed and all of your assets are titled in the name of the trustee, then there will not need to be a probate proceeding and therefore you’ll be avoiding probate. If however you do not transfer or title all of the assets in the name of the trustee of the trust, then your assets would then have to be probated, which is usually under a will that says I leave everything to the trustee. That’s called a pour-over will. Then you have to probate those assets to put them into the trust.
The trust then has to be administered. Depending on the complexity of the trust or whether it’s an outright distribution or you hold the assets for a period of time and pay out income or if it’s a special needs trust, you may need to have an attorney assist you as far as the administration of the trust. Some of the things that a successor trustee would need to do would file a notice of trust with the clerk of the court.
Also there are certain tax ramifications and a that a successor trustee, meaning after the person who set up the trust dies, that’s usually a revocable trust, they need to apply for what they call a Federal Identification number so that the taxes would be reported in their fiduciary or as a trustee rather than under their individual Social Security number. They may need some guidance so it won’t have to go through probate. The biggest problem with probate is having to pay the attorneys a fee. You may need to engage the services of an attorney in order to assist you as far as the administration of a trust.
An answer to your question is is if the trust has all the assets of the decedent and the trustee can distribute everything out and there’s no income, then you can avoid probate by setting up a trust. You can also look at various alternatives doing estate planning on how to retitle assets and possibly avoid the necessity of spending quite a bit of money to establish a trust.
If you wish to do some estate planning and try and figure out how to avoid probate the most economical way, give me a call at 727-847-2288.