Depending on one’s family circumstances and financial situation, it may be advisable for clients to avoid probate entirely, utilizing a revocable living trust.
Avoiding Probate with a Revocable Living Trust
Probate is the legal process that must be completed before the assets in the estate are accessible to the Executor. Most Executors hire a lawyer to complete the probate process, thereby incurring legal fees. It is possible to avoid probate entirely by creating a revocable living trust, and then titling one’s assets to the trust during one’s lifetime or, alternatively, designating the asset as payable on death.
Probate avoidance becomes advisable when the major beneficiaries in a Will are not the decedent’s heirs-at-law, or next of kin. When a client plans to leave assets to individuals (or organizations) other than the heirs-at-law, there is always the risk that the family of origin will file an objection, contesting the will’s validity, thereby embroiling the estate in litigation.
In addition, probate avoidance is beneficial because it avoids the necessary freezing of assets that occurs during probate. When a person dies, all assets that the person owned in their individual name are frozen, and therefore inaccessible to the executor, until the probate process has been started and the executor has been sworn in by the court. This process takes a minimum of two weeks, and can last months in complicated situations. This can create a financial burden on the executor and the family, as they struggle to pay the decedent’s expenses while waiting for the legal authority to gain control over the decedent’s assets.
Finally, probate avoidance is beneficial where the client owns real estate outside the state of Georgia. The probate process in Georgia only gives the executor control over Georgia real estate. If the decedent also owned real estate outside of Georgia, it would require a second legal process in that other state, in order to gain control over the out-of-state real property.
In the initial consultation, an attorney discusses these issues with a client. The attorney will suggest various ways to transfer property to designated persons outside of one’s probate estate, including joint tenancies, payable on death designations and/or a revocable living trust. Each method has pros and cons that should be discussed in depth.
Prior to the initial consultation, a client should gather together all documentation of her assets and ascertain their current value. Should the client decide to utilize a revocable living trust, the attorney will provide legal advice as to which assets need to be titled to the trust and which should remain in the client’s name but be designated payable on death to other individuals or to the trust itself.