The primary advantage of a revocable trust is to avoid probate. Probate is a proceeding that occurs typically when an individual passes away. The probate process is something that can be long and costly, and so by having a revocable trust you can avoid the probate process in its entirety.
One of the disadvantages of a Trust are that Trusts are very difficult to understand. Historically, trusts used language that was specific to the legal field. For those that were not trust and estate lawyers, it was almost impossible to understand.
You can avoid probate by owning property as follows: Joint tenancy with right of survivorship. Property owned in joint tenancy automatically passes, without probate, to the surviving owner(s) when one owner dies. Tenancy by the entirety.
With that said, revocable trusts, irrevocable trusts, and asset protection trusts are among some of the most common types to consider. Not only that, but these trusts offer long-term benefits that can strengthen your estate plan and successfully protect your assets.
Put assets into a trust
If you place assets within a trust they will not form part of your estate on death and avoid inheritance tax.
Whose responsibility is it to get probate? If the person who died left a valid will, this will name one or more executors, and it is their responsibility to apply for probate. If there isn't a will, then inheritance rules called the rules of intestacy will determine whose responsibility it is to get probate.
Probate is not required to deal with the property but may be needed if the deceased's estate warrants it. Much will depend on what the deceased owned and what the beneficiaries intend to do with the property.
TOD Deeds Are Less Expensive and Less Complicated Than Living Trusts. A transfer on death deed is a simple document that identifies the owners of the real estate, the legal description of the real estate, and the beneficiaries who will inherit the property when the current owners die.
Probate is the legal process for dealing with the estate of someone who has died. An estate, in this case, relates to the money and property of the deceased. If the deceased left a will, they may have specified an executor or executors. These are people who are expected to “execute” the will.
Does a Will override a Trust? It's possible to create both a Will and a Trust, and in many cases, they'll complement each other. However, if there are any issues or conflicts between the two, the Trust will normally override the Will – not the other way around.
When Assets Go Through Probate. As the name suggests, probate assets must go through a court-supervised probate process after the owner dies, because probate is the only way to get the asset out of the deceased owner's name and into the names of the beneficiaries.
The advantages of placing your house in a trust include avoiding probate court, saving on estate taxes and possibly protecting your home from certain creditors. Disadvantages include the cost of creating the trust and the paperwork.
Does a trust file its own income tax return? Yes, if the trust is a simple trust or complex trust, the trustee must file a tax return for the trust (IRS Form 1041) if the trust has any taxable income (gross income less deductions is greater than $0), or gross income of $600 or more.
Trusts are established to provide legal protection for the trustor's assets, to make sure those assets are distributed according to the wishes of the trustor, and to save time, reduce paperwork and, in some cases, avoid or reduce inheritance or estate taxes.
Many banks have arrangements in place to help pay for funeral expenses from the deceased person's account (you should contact the bank to find out more). You may also need to get access for living expenses, at least until a social welfare payment is awarded.
For the person who dies, their share of the property passes to the surviving joint owner automatically on their death. If however the property is owned as tenants in common, then the deceased's share of the property will pass in accordance with their Will or under the rules of intestacy if they have not made a Will.
In an ownership trust, the trust property belongs to the trustees in their capacity as trustees. Now, in a bewind, if the beneficiary dies, the beneficiary has always been the owner of that property, and therefore the trust property will form part of that beneficiary's estate.
What happens if I don't apply for probate? If you don't apply for probate when it's needed, the deceased's assets can't be accessed or transferred to any of the beneficiaries. Probate gives a named person the legal authority to deal with the assets. Without this authority, they can't do anything with the assets.
The fact that you had power of attorney during someone's lifetime doesn't have any bearing on whether or not probate is needed after they die. Whether probate is needed will depend on what the person owned when they died owned.
Technically the answer to 'can you sell a house before probate' is yes, yes you can. Although you will need probate to exchange and complete, nothing is stopping you from listing your house on the market and accepting any offers, if you get them, before being given the Grant of Probate.
For all practical purposes, the trust is invisible to the Internal Revenue Service (IRS). As long as the assets are sold at fair market value, there will be no reportable gain, loss or gift tax assessed on the sale. There will also be no income tax on any payments paid to the grantor from a sale.
A Simple Trust is a trust which makes no distributions other than current income. The trust terms require all its income to be distributed currently and do not provide for charitable contributions.