Living Trusts

Category: Law

How Living Trusts Avoid Probate Here’s the lowdown on basic probate-avoiding living trusts. Most people want to leave as much of their money to their children, or other heirs, as possible — and want to avoid a big chunk of that money going to probate lawyers. That’s where living trusts come in — they can eliminate the need for probate and probate fees. Probate involves inventorying and appraising the property, paying debts and taxes, and distributing the remainder of the property according to the will. When you make a living trust, your surviving family members can transfer your property quickly and easily, without probate. More of the property you leave goes to the people you want to inherit it. Types of Living Trusts The two most common types of living trusts are: a basic living trust (for an individual or couple), which avoids probate, and an AB trust (for a couple), which both avoids probate and saves on estate tax. This article discusses basic trusts. For information on AB trusts, see Nolo’s article Tax-Saving AB Trusts. Unless you expect to owe federal estate tax at your death or your spouse’s, a basic living trust to avoid probate is probably all the trust you need. (Fewer than 2% of estates — those worth more than $2 million — owe estate tax.) To determine if your estate will be subject to estate taxes, see Nolo’s Estate and Gift Tax FAQ.