Traditionally, every state requires that a person’s will go through a process called probate. This is a court-supervised process that authenticates a person’s will and ensures that all assets are distributed accordingly. One way to avoid the probate process in Connecticut is to set up a trust.
Trusts are the key to skipping probate
To avoid the long probate process, you can establish a trust. There are several different types of trusts, including living trusts and testamentary trusts. In all cases, the trust includes assets that were accumulated by the grantor, which is the person who is giving the assets away. The person who receives the assets is called the beneficiary or trustee.
Considering a living trust
One great way to help ease the transfer of assets to a beneficiary is to set up a living trust. This type of trust is created during the asset owner’s lifetime. The trust designates an individual, known as a trustee or beneficiary, who is given responsibility for the named assets in the trust.
For example, a living trust may be constructed to pass down ownership of a house to a trustee during the grantor’s life. While the grantor is alive, the trustee manages the asset. Once the grantor passes away, the trustee takes over ownership of the asset without any need for the probate process.
Revocable vs. irrevocable
A living trust can be revocable or irrevocable. In an irrevocable living trust, the grantor cannot change the trust after it’s established. They can’t alter the trustee or any other part of the legal agreement. With a revocable trust, the grantor may alter the trust, so they are designated as the trustee and retake control over the assets named in the trust agreement.
When it becomes time to think about estate planning, trusts are a great place to start. Opting for living trusts can allow you to pass down assets to your beneficiaries without a long, drawn-out process. Trusts help to ensure that trustees can obtain ownership of the grantor’s assets without the need for the probate process or added estate taxes.