Avoiding Probate with a Living Trust

The main purpose of a living trust is to avoid probate. Probate is the legal process in which a will is determined to be valid, as well as determining how an executor or representative of an estate distributes the property of the person who has died. Each state has a minimum value of an estate for probate, meaning that if the estate is valued lower than the state minimum, no probate would be required. Otherwise, the assets owned generally must first go through the probate process in order to transfer funds to the heirs.

The probate process can be used to validate a will, transfer property, ensure that all debts are paid (including probate and legal fees), and change the name of titled assets from the decedent to the heirs. Probate does have its purpose; however, this process also has some significant disadvantages. For example, the process may be very expensive and ultimately can consume between 4 percent and 10 percent of the total gross estate in administrative fees.

According to several studies on the subject of probate, the average duration of the probate process is 12-18 months, during which time all the estate's assets are frozen and administered by the court. And, if a will is contested (as with approximately 35 percent of probate cases), the time and cost the probate takes to process can more than double.

Visit Free Living Trust Information for all your information needs on Living Trust.