When is a trust better than a will to distribute assets?

Last column we explained why the process of transferring assets should never be more important than ensuring those assets end up with the people you want to receive them. So long as this priority is protected, there can be significant advantages to plan for the right way to transfer those assets. 

For many, probate is a safe and appropriate way to transfer assets. It avoids the pitfalls of the shortcuts discussed in recent columns. However, if done in the right way, there can be advantages to avoiding probate. When assets are placed into a trust, those assets need not go through probate to be transferred. This allows those assets to be transferred more quickly and conveniently.

For example, when held by a trust, real property can be transferred immediately by having the trustee sign a deed. There is no need to involve probate or a court. If expediency is important to you, a trust is a better way to go than a Will and probate.

Privacy is another reason to use a trust rather than a will. When a will is used, the personal representative must compile a list of the deceased person’s assets and file a notice with the court that the inventory is available for review by certain “interested parties.” Those “interested parties” may include people who do not have a right to receive any property. 

However, only the actual beneficiaries of a trust must be informed of the trust and their rights. Others do not have a right to be involved. If this type of privacy is important to you, a trust is the better instrument to pass on your assets.

Finally, probate only addresses assets located in that state. If you have real property in more than one state, it may be more cost effective to place both properties in a trust and avoid having to go through probate twice.

Garrett Forsgren is a local attorney who provides free estate planning presentations. His office can be reached at 970-245-8021 or .(JavaScript must be enabled to view this email address). Steve Wright is an attorney in Idaho Springs, Idaho.


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