Probate avoidance trusts

There are trusts that are created to avoid probate.  Probate avoidance trusts are often called living trusts or revocable trusts. A living trust is a trust that was created to be effective during the life of the person who created it. That person is called the settlor or the trustor, the two words are interchangeable. The opposite of a living trust is a testamentary trust.  That trust becomes effective upon the death of the settlor. The opposite of a revocable trust is an irrevocable trust, which is a trust that cannot be revoked, and usually not amended.

A probate avoidance trust is a revocable living trust because it is effective during the life of the settlor and can be amended or revoked by the settlor. What it is called is not important, but because the terms living trust and revocable trust are often used to describe it, it is important to understand the terms before reading about or trying to discuss what a trust can do.

In almost all cases, the primary purpose of a living, revocable trust is to avoid probate.  Many of the clients for whom I prepare probate avoidance trusts come to my office with a story about the horrors of probate.  They talk about how long the process took, how expensive it was, and about the fact that they had no idea what was going on during the process.  They usually don’t know much about any kind of trust, but they’re sure they want to avoid probate.  In most cases it makes good sense to create a probate avoidance trust and in some cases it doesn’t. More on that in a later entry.