Probate and trust administration are different processes.
You have done your calculations.
You likely will have assets remaining when you die.
There is more than one option when leaving an inheritance to your loved ones.
The two primary methods are through a last will and testament or through a revocable living trust.
According to a recent Lake County News article titled “Appreciating the differences between probate and trust administration,” your choice will depend on your goals and needs.
Although probate and trust administration are not the same proceedings, they do have similarities.
The assets for the decedent must be gathered, secured, appraised, and inventoried.
Creditors are notified and taxes filed and paid.
Descendants also need to be informed of the estate administration.
What are the difference between probate and trust administration?
Probate is supervised by the court.
If you have a last will and testament, this must legal document be filed with the court after your death.
In Kansas, that must occur within six months of death, but in Missouri, that deadline is one year.
Regardless, if you file the last will “out of time,” then it is just a pile of paper with no legal authority.
Legal notice must be published in the newspaper.
Court appearances are also required to probate a last will.
The last will and other court documents become part of the public record.
This means estranged relatives or disinherited relatives can access your final wishes.
In some instances, unhappy family members may challenge your last will.
If you have no estate plan, your estate will pass through probable court proceedings according to the intestacy laws of your state.
When you create a “fully funded” revocable living trust, it will avoid probate proceedings.
With trust administration, you can protect the privacy of your estate plan from the general public.
Only the heirs, beneficiaries, and trustees can see the trust documents.
Although a last will is less expensive upfront, the costs can add up later.
Obviously, as a court process, there will be court costs and fees assessed.
A newspaper publication fee, attorney fees, and personal representative fees will also need to be paid.
If the estate is more complex, the court may add other fees to reflect the amount of additional time required to probate the estate.
With a revocable living trust, the fees are higher upfront.
In almost all instances, a trust will be more expensive to create than a last will.
For trust administration, the estate planning attorney and the trustee are typically paid hourly.
Because court proceedings are not involved, the hours required to administer a trust will be less than those required for probate.
Work with an experienced estate planning attorney to create a plan to meet your estate administration goals.
Reference: Lake County News (July 4, 2020) “Appreciating the differences between probate and trust administration”