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  • Colleen L. Clark, Esquire

Benefits of Using a Revocable Living Trust to Avoid Probate When Owning Property in Multiple States


revocable living trust

Introduction

Revocable Living Trust is an estate planning tool that offers a multitude of benefits, one of which is the ability to avoid the probate process. This advantage becomes particularly significant for individuals who own property in multiple states and would need to go through probate more than once.


What is a Revocable Living Trust?

Revocable Living Trust is a legal entity created to hold ownership of an individual’s assets. The person who creates the trust, known as the grantor, maintains control over their assets during their lifetime and designates how these assets will be distributed upon their death. The term “revocable” means that the grantor can modify or terminate the trust as they see fit during their lifetime.


The Probate Process

Probate is a legal process that takes place after an individual’s death. It involves proving in court that a deceased person’s will is valid, identifying and inventorying the deceased person’s property, having the property appraised, paying debts and taxes, and distributing the remaining property as the will (or state law, if there’s no will) directs. Probate can be time-consuming, costly, and lacks privacy. If an individual owns property in multiple states, their estate may have to go through probate in each of these states, known as ancillary probate.


How a Revocable Living Trust Can Help

A Revocable Living Trust can help avoid the probate process. When property is transferred into the trust, technically, it belongs to the trust itself, not the deceased. Therefore, it does not have to go through probate. Upon the death of the grantor, the trustee—the person appointed in the trust document to manage the trust—simply transfers ownership to the beneficiaries named in the trust document. There’s no need for probate court.


Case Study

Consider the case of Mr. Smith, a resident of New Jersey, who owned a second home in Florida. By placing both properties in a Revocable Living Trust, he was able to avoid ancillary probate in Florida and primary probate in New Jersey. Upon his death, his trustee was able to transfer the properties to his beneficiaries without court involvement, saving time and money, and keeping his personal affairs private.


Conclusion

In conclusion, using a Revocable Living Trust can provide significant benefits for individuals who own property in multiple states by avoiding the time-consuming and costly probate process. Contact Clark Esquire Group at 732-930-3160 to see if this trust is right for your specific circumstances.

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