When a loved one passes away, his or her estate often goes through a public court-managed process called probate or estate administration where the assets of the deceased are managed and distributed. Probate can be expensive and tie up the assets of the deceased for a prolonged period before beneficiaries can receive them. Important to mention again the probate administrtation is visible to the public via court records.

If your loved one owned his or her assets through a properly drafted and funded Living Trust, it is likely that no court-managed administration is necessary, though the successor trustee needs to administer the distribution of the deceased.

The length of time needed to complete probate of an estate depends on the size and complexity of the estate as well as the rules and schedule of the local probate court.

Every probate estate is unique, but most involve the following steps:

• Filing of a petition with the proper probate court
• Notice to heirs under the will or to statutory heirs (if no will exists)
• Petition to appoint Executor (in the case of a will) or Administrator for the estate
• Inventory and appraisal of estate assets by Executor/Administrator
• Payment of estate debt to rightful creditors
• Sale of estate assets
• Payment of estate taxes, if applicable
• Final distribution of assets to heirs

A properly drafted Revocable living trust (RLT) is a powerful estate planning tool that allows you to remain in control of your assets during your lifetime, have them managed during incapacity, and efficiently and privately transfer them to your loved ones at death according to your wishes.

Creating a Revocable Living Trust and transferring your assets to the name of that trust will generally not affect your ability to control such assets. During your lifetime when you are mentally competent, you have complete control over all of your assets.  As the trustee of your trust, you may engage in any transaction that you could before you had a Living Trust. There are no changes in your income taxes. If you filed a 1040 before you had a trust, you can continue to file a 1040 when you have a Living Trust. There are no new Tax Identification Numbers to obtain. Because a Living Trust is revocable, it can be modified at any time or it can be completely revoked if you so desire. Upon your incapacity, the individuals you designate will be able to transact on your behalf according to the instructions you have laid out in the Living Trust. Upon your passing, the Living Trust can no longer be modified and the successor trustee(s) you have designated will then proceed to implement your wishes as directed.

Sometimes referred to simply as a Living Trust, an RLT holds legal title to your assets and provides a mechanism to manage them. You would serve as the trustee and beneficiary of your trust during your lifetime. You also designate successor trustee(s) to carry out your instructions for how you want your assets managed and distributed in case of death or incapacity.

In order for the Living Trust to function properly, you need to transfer many of your assets to your Living Trust during your lifetime. The fact that it is “revocable” means that you can make changes to it or even terminate it at any time.