20 Sep Avoiding Probate with a Living Trust…Fact or Fiction?
“Avoiding Probate” and “shielding assets” through use of a revocable or “living trust”
This is one of the most common areas of confusion in the estate planning area of the law. Consumers have been led to believe there are many benefits to using trusts in estate planning, including the ability to “avoid” probate and shield assets from scrutiny when seeking financial assistance from the government for long term care. As regards the first, I tell my clients that the only way to avoid probate is to own no real estate and very little of anything else in the world. If one has this objective and is successful in divesting oneself of all worldly assets then, yes, their estate need not be probated. However, should one not successfully undertake the necessary steps to achieve this goal on an ongoing basis or die owning anything in their own name alone, then the probate process must be invoked to transfer these assets to the desired recipients. As for shielding assets to allow one to qualify for government assistance, most commonly Title 19, revocable trusts do not work, as the government reasons that if you can undo it then so can they. The only way to accomplish this objective with a trust is if it is irrevocable. I tell my clients that irrevocable is a very big word as it means once you’ve done it you can’t undo it.
If you have questions about living trusts or other aspects of your estate planning, please contact my office for a consultation.
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