Trusts and the Probate Process

Many Ohio residents set up revocable living trusts to administer assets both before and after their lifetimes.  There are a number of different reasons to undertake trust planning, but one of the reasons often given is to “avoid probate.”  However, setting up the trust by itself, without taking any further steps, won’t cause an individual’s assets to avoid the probate process.

Included with almost every revocable living trust plan is a document called a pour-over will.  A pour-over will is simply a will that leaves all the assets of the decedent to the trust rather than people named individually.  However, a will only operates to administer assets by operation of the probate court.  In other words, a will can’t do anything without an order from the probate judge.  If that’s the case, how does the trust avoid probate?

I tell clients that a pour-over will should be thought of as a sort of backstop that catches things that the rest of the trust plan misses.  It’s an important document to have in place, but it shouldn’t be thought of as the end game.  In other words, if the trust is being utilized in part to avoid the probate process, some additional steps should be taken to ensure that the trust is funded either during the individual’s lifetime or as a POD/TOD beneficiary at death.

If assets are transferred to the trust during the individual’s lifetime, the probate court doesn’t have to do anything to permit trust administration – the assets are already in the trust and ready to go.  If the beneficiary designations are changed to name the successor trustee of the trust as the TOD or POD beneficiary of the assets, then the assets will transfer to the trust upon death without involvement of the probate court – the trustee will simply have to provide a death certificate to the relevant institution or, in the case of real estate, file an affidavit with the local county recorder.

The important thing to remember is simply that even a perfectly drafted trust will only avoid the probate administration process (if that’s goal) if an additional step is taken after the signing of the trust to ensure that it will be appropriately funded at the right time.

Mark Coriell


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