Why to Avoid Probate, and How

By: Madeline C. Hutchings | October 23, 2020

This week is National Estate Planning Awareness Week. If you have ever wondered why everyone is trying to “avoid probate,” take one minute now to become an expert. At the same time, learn how a trust can help you bypass the probate process.

“Probate” refers to what happens to your property when you die. It is a legal process that involves identifying, locating, and valuing your assets and eventually distributing these assets to your heirs or beneficiaries. There are several aspects of this process that motivate people to “avoid probate”:

  • Time-consuming: New Hampshire law requires that creditors be given six months to file claims against your estate, before your property is distributed to your heirs or beneficiaries. Probating even a modest estate can take upwards of eight months. It is not unusual for your property to be tied up in probate for over a year.
  • Costly: Everyone involved in this lengthy process is entitled to be paid for their work. Your estate may end up paying executors, accountants, appraisers, attorneys, or real estate agents.
  • Public: Your Will and all its terms become a public record during probate.

A good way to avoid the probate process is to convert your “probate assets” into “non-probate assets”—which do not need to go through probate.

One straightforward way to accomplish this is to create a trust and put your property into it while you are living. Assets that are held in a trust are “non-probate assets.” They can be distributed immediately after death, or at any other time you specify in the trust document.

A “revocable” trust keeps your property out of probate—i.e., makes everything in it a non-probate asset—but still gives you complete control of the property. You decide the terms of the trust. And “revocable” means that you, the creator, can revoke or change the trust at any time. Your trust “owns” the property inside it, but you own the trust.

A revocable trust is useful for estates of all sizes and levels of complexity. Couples are also free to establish one “joint” revocable trust, as a simple way to keep their property in the same place. A trust is also a great way to protect assets for the benefit of future generations and appoint who will manage your property if you become incapacitated. An estate planning attorney can discuss these benefits and help determine whether a revocable trust is right for you.

The COVID-19 event affirms the importance of estate planning for both younger and older individuals, and this year’s National Estate Planning Awareness Week is a better time than ever to get around to your estate planning. (A quarantine is also a perfect time to combine your holiday celebrations. Schedule a video meeting from the safety of home, and plan your estate with a Reuben in hand. This week is also National Kraut Sandwich Week.)