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Trusts vs. Probate

What is probate?

Probate is a legal process which determines the valuation and distribution of a deceased person’s property, with or without a will. A probate judge makes sure a person’s debts are paid, establishes clear title to property, approves attorney, CPA, appraiser and administrative fees, and then distributes what remains of assets according to a will or applicable law if there is no will.

Probate can be time consuming, ranging anywhere from several months to several years. Court proceedings can be costly, including attorney and court filing fees which can run into several thousands of dollars, depending on a variety of factors, including the value of an estate. In addition, probate can prove stressful and potentially embarrassing to surviving family since court records are public information. What are the advantages of a trust over probate?

Individuals can curtail, and in some circumstances, avoid probate altogether by establishing a trust, which is a legal entity created to hold title or ownership of a person’s designated assets.

Under your direction, title to your designated assets is transferred from yourself individually to your trust which is overseen by Dunham Trust Company as your trustee. The trust holds title to your assets, but allows you control during your lifetime. Upon your death, the trust provides for the transfer of all assets to your named beneficiaries in accordance with instructions previously set forth by you as described in the trust. Unlike probate, the details of a trust are not public information, and therefore provide the element of privacy for your family.

The use of trusts may involve a complex set of tax rules and regulations. You should consider the counsel of an experienced estate planning professional before implementing such strategies.

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