When Should Revocable Trusts Avoid Probate?

Although there are many good reasons for their implementation, Revocable Trusts are too often promoted for the wrong ones. Revocable Trusts are commonly referred to as Living Trusts or Revocable Living Trusts (hereinafter referred to as “RLT”) and are promoted as a way to avoid the costly, time-consuming, public spectacle of PROBATE.

For the majority of situations, total cost for probate in Georgia is less than $3,000, administration is usually complete within six months, and public disclosure of assets is not required. However, there are situations in which probate can be protracted, expensive, and emotionally challenging. In these cases, an RLT would likely have avoided many problems. The following is a sampling of situations that justify an RLT [instead of probate]:

1. Possibility of a Year’s Support Petition: Georgia law allows a surviving spouse to petition the Probate Court for “Year’s Support” in which the surviving spouse may be awarded the entire estate – even if the Last Will & Testament stated a different intention. This is usually only a problem where the decedent had children from a prior relationship or does not want the surviving spouse to receive all assets outright. A Petition for Year’s Support does not include RLT assets.
2. Possibility of a challenge: This occurs when a threat of challenge to the Will exists that may add delay and costs to the otherwise efficient probate process. For example, an heir at law is being disinherited through the Last Will & Testament. RLT assets do not pass through probate.
3. Estranged heir: The probate process requires that all “heirs at law” be notified as part of the process. In cases where the location of heirs is not known, delays and added expenses will likely result in satisfying the legal notice requirements for probate. Notice to heirs is not required for RLTs.
4. Perishable Assets: A family owned business, for example, may be owned and operated by Dad as a sole proprietor. When Dad passes away, his business will be owned by his estate. The Executor/Administrator will have no authority to act on behalf of the business until the Probate Court authorizes a personal representative. Assets held by an RLT can be immediately controlled and managed at Dad’s death or incapacity.

Remember, there are two steps to accomplish proper planning with revocable trusts: establish a legal trust document and then “fund” the RLT with assets that would otherwise be included in probate.

Bryson Law Firm: Suwanee, Georgia. Attorney Richard Bryson has over 15 years experience with investment entities, elder law, estate planning, probate, wills and trusts, tax planning, tax dispute resolution, asset protection, personal injury, business formation, real estate transactions, and Medicaid and VA planning. Contact our Gwinnett County law firm at 404-909-8842.