Are Trust Assets Subject to the Probate Process?

Common types of trusts include:

  • Revocable Trusts (or Revocable Living Trusts). This is the most common type of trust. They are set up by a grantor or grantors; often a married couple. The person creating the trust is both the trustee and the beneficiary. During the person’s lifetime, the trust can be amended as circumstances change, and assets can be easily contributed to or withdrawn from the trust at any time. There are several reasons to create this type of trust including probate avoidance, privacy of administration of assets, and allowing the grantor to create a framework for the administration of their assets—i.e., the “how” and “when” beneficiaries receive assets.
  • Irrevocable Trusts. This is a “permanent” trust that is sometimes helpful for tax and probate matters. Many irrevocable trusts are funded with life insurance policies.
  • Charitable Trusts. These trusts facilitate philanthropic goals while providing tax benefits.
  • Special Needs Trusts. These trusts are essential for protecting loved ones with disabilities without affecting—i.e., jeopardizing—their eligibility for government assistance.
  • Spendthrift Trusts. These trusts can be used to control distributions to beneficiaries (such as minors) who might not be financially savvy.
  • Tax Bypass (or Credit Shelter) Trusts. These trusts can help minimize federal estate tax impact for married couples