Avoiding probate is a tremendous advantage, but unless you are familiar with the probate court process, you may not fully appreciate this benefit. Probate court is the state court that handles the orderly transfer of your assets according to your wishes as expressed in your will or, if you don’t have a will, by the intestate laws of your state.

Not all of your assets need to go through probate. Any accounts that are held jointly with rights of survivorship are automatically transferred to the survivor—bypassing your will and avoiding probate. Transfer on death and payable on death accounts (discussed in a future article) also bypass your will and avoid probate. While there are things you can do to avoid probate for some of your assets, you won’t be able to avoid probate on all of your assets unless you have a trust.

What’s wrong with probate and how can a Living Trust help?
You may be thinking, “What’s so wrong with probate?” Depending on the size of your estate and the laws of your state, the probate process can be time-consuming, difficult to navigate, expensive, and public.

1. Probate is time-consuming. For example, in many states, probate can take many months. What does this mean for your loved ones? They won’t have control of your assets until the probate process is completed—maybe a year or more after you pass away. If they need your assets before the probate is complete, they will be locked out. Would you rather give your loved ones full and immediate control of your assets or make them wait months and months?

A long and drawn-out probate process also puts additional stress on your family. Recovering from the death of a loved one is one of the hardest things to experience. Different cultures and people handle this process differently, but dealing with a long probate process is not healthy and does not make it any easier for those you care about.

The Living Trust is like a Will on steroids. Like a Will, it specifically expresses your wishes but—unlike a will—it doesn’t require probate to oversee the transfer of your assets. This is similar to what happens with a transfer on death account or a joint account with rights of survivorship—like trust assets, these assets bypass your will and the probate process.

2. Probate is expensive. If you go through probate, there are certain fees that you must pay. State laws vary considerably, but usually these fees are based on a percentage of your assets going through probate and paying your attorney and the executor (the legal representative of the assets of the deceased in probate). These fees can be high—often $20,000, $30,000, or more.

The Living Trust Solution – Again, all of the assets in your Living Trust bypass probate court. Since your assets don’t need to go through probate before they are distributed to your loved ones, you can avoid costly probate fees.

3. Probate is public. Remember, probate is a court proceeding. As a result, once the probate process is completed, the Will and the inventory of estate property is a public record and freely available for anyone to review. If privacy is important to you, a Living Trust is your only solution.

The Living Trust Solution – The initial formation of the Living Trust and the eventual disposition of assets from the trust is completely private. The Living Trust and the assets avoid the public nature of the probate court proceedings.

The bottom line is if you can avoid probate, you should. Your loved ones will be going through enough without dealing with the bureaucracy, expense and publicity of probate court.