At Luis E. Barreto & Associates, we have extensive experience with probate litigation. If you have read our blog in the past, you will have discovered several ways to find yourself in probate litigation. After which, you may have committed to creating an estate plan that avoids probate. Many people quickly turn to trusts as a means of bypassing probate, and in some cases, that may be the case. However, we want to explain when and why a trust won’t allow your estate to circumvent probate.
How Does a Trust Bypass Probate?
When someone passes away without a will, their assets go through the probate process before getting distributed. Because there is no will, the assets go to the beneficiaries based on intestate laws. Additionally, the court will appoint a personal representative to oversee this process and ensure that any debts the deceased left behind are paid off with the assets contained in the estate. If there is a will, a court establishes that the will is valid and distributes the assets per the deceased’s instructions.
Trusts are significantly different. They are entities created by estate planning attorneys. A person can place their assets into the trust, and then the entity owns them. When people create revocable living trusts, they usually name themselves as a trustee so they can use and manage the assets while they are still alive. Subsequently, they will name a successor trustee who will manage the trust when the first trustee passes away. If all your assets are in a trust, then there are no assets to pass through probate. Why? Because when done correctly, the trust owns them. It will be the trustee’s responsibility to distribute the contents of the trust.
Can Assets in a Trust Still Go through Probate?
Yes, and it circles back to our previous discussion about debts the deceased left behind. Florida laws state that a revocable living trust is still liable for the deceased’s debts for two years. Creditors have two years to make a claim against the estate, and if the claim has merit, then the creditor will get reimbursed through the revocable living trust. If the trustee immediately distributes the contents of the revocable living trust to the beneficiaries and then is contacted by a creditor, then the trustee is liable for that debt.
In other words, the assets could remain tied up in a revocable living trust for two years. The other option is to initiate probate despite having a revocable living trust. Why? Because the estate will be publicly advertised to allow creditors to come forward. When this is done, the trust is only liable for debts for three months. This allows the beneficiaries to receive the estate’s contents in a condensed amount of time.
Contact an Estate Planning Attorney Today
There are a multitude of trusts available for you to choose from. If you are committed to creating a trust, we will find the one that fits your needs and wishes. Your role is simply to tell us what you want to accomplish with your estate plan and then allow us to make recommendations that lead to an efficient resolution. To speak with an attorney at Luis E. Barreto & Associates, contact us to set up your free initial consultation.
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