Do I Need A Trust To Avoid Probate?
The answer is No.
With regards to transferring assets upon death, there are 4 ways to transfer assets.
Estate Administration
1. Joint Ownership
2. Beneficiary Designations
3. Trust
4. Probate
Do we need a Trust to avoid probate? The answer is no.
But depending on the situation, we might want a Trust.
One of the reasons why we might want a Trust is Asset Protection. Protection from creditors and long-term care cost. Another reason we might want a Trust is to protect the kids or beneficiaries. Another reason is to help keep things organized, everything is on one spot.
Some reasons why you may not want a Trust? It’s a little more costly to set up, a little more complicated.
But really at the end of the day, it’s all about figuring what your goals are and developing the best strategy. It is not tied to the size of your assets or estate. If you want to organize things, if you want to protect your assets, if you want to make sure what you leave to the next generation is protected, probably you want a Trust. If you’re looking at what’s the least amount of investment, what’s the simplest thing to do? Maybe you don’t want a Trust.
Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.
Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.
Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.
With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.
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Episode Transcript
Do I need a Trust to avoid Probate?
Welcome to Berry’s Bites. Please join our host Attorney and Financial Advisor, Chris Berry.
The answer is no. With regards to transferring assets upon death, there’s four ways assets transfer. One is through joint ownership. So, joint between a husband and wife, or joint between anyone else, joint ownership with right or survivorship. Second would be through beneficiary designations. You have a beneficiary of your life insurance, your 401k, your IRA. Third would be through a Trust. And this is a route a lot of people go.
But if an asset doesn’t pass through one of the first three, then it ends up in probate. And that’s what we want to try to avoid at the end of the day. So, do we need a Trust to avoid probate. The answer is no. But depending on the situation, we might want a Trust. One of those reasons why we might want a Trust is asset protection. So, protection from creditors and long-term care costs. Another reason we might want a Trust; protect the kids or beneficiaries.
Another reason we might want a Trust is, helps keep things organized. Everything goes into one spot. Some reasons why we might not want a Trust; a lot more costly to set up, so more of an investment. A little more complicated, and really, it’s just about figuring out what your goals are, developing the best strategy. It’s not tied to the size of your assets or your estate. Really, at the end of the day it’s all about, what is your goal?
If you want to organize things, if you want to protect your assets, you want to make sure what you leave to the next generation is protected; probably you want a Trust. If you’re looking at, okay, what is the least amount investment? What’s the simplest thing to do? Maybe you don’t want a Trust. But that’s where we sit down with clients, figure out, what is their goal? And then we develop the best strategies. And then and only then, do we get into talking about tools.