Probate & Testamentary Trusts

MANY PEOPLE ARE AWARE THAT A WILL IS REQUIRED IN ORDER TO PASS THEIR ASSETS TO THEIR HEIRS. What most people are unaware of is that all Wills (including those with Trust provisions in them) must go through a transfer process called Probate. Wills must be submitted to a probate court before they can go into effect. Also, a Will provides no protection if you become physically or mentally incapacitated.

Probate is the legal process through which a probate court guarantees to you that your assets will pass to the individuals named in your Will as heirs and in the manner in which you wanted them to be delivered to those individuals. Where you died determines which state probate court your assets must ultimately pass through.

The probate court determines (1) if your Will is legally valid; (2) that all of your debts are paid; and (3) that all of your assets are accounted for and distributed according to the terms and conditions of your Will. The probate process is the only legal way that your name can be legally taken off the title of your assets after you die, and registered in the name of the individual(s) that your Will indicates is/are to be the new owner(s).

Not all of your assets will go through probate. Assets that are held in joint ownership (i.e. Joint Tenancy) that transfers to the surviving owner, and assets that have a valid beneficiary designation (like a life insurance policy or an Individual Retirement Account) do not go through probate. But this may contradict how you wanted to “control” the passing and ownership of the assets after you die.

The probate process can be expensive. Especially certain assets like real estate. Generally, the more assets you have, the more time it will take to probate them, which will cause your probate expenses to escalate.

Testamentary Trusts

A Testamentary Trust is designed for transferring assets. Often, it makes sense when setting up a Trust to appoint a neutral third party to administer the smooth transfer of assets to beneficiaries.

InTRUSTment Northwest can serve as trustee of Testamentary Trusts to ensure a safe and secure transfer of assets to beneficiaries. Depending on size Testamentary Trusts can be billed at our normal rates, which are considerably less than conventional Trust companies.