Trust vs. Probate: Which Is Best for You?
Planning your estate for the future can feel abstract until you picture the decisions your family might face during challenging moments. There is no single approach that fits every household. However, determining whether trusts or probate offers the better benefits for your estate and family often depends on what you own, how it's titled, who you want to receive it, and the level of court oversight you want.
By understanding what probate covers and how a trust works, you can build a plan that aligns with your priorities. At Brazil Clark, PLLC, we are experienced in helping our clients understand the difference between trusts and probate and how either (or both) can benefit their estate plan and reduce conflict.
Located in Nashville, Tennessee, our firm serves clients throughout Rutherford County. Contact us today to schedule a consultation and explore how you can build an effective plan for when you pass away.
What Does Probate Cover and When Does it Apply?
Probate is the court process that settles a person's estate after death. It's commonly used to validate a will, appoint someone with legal authority to act on behalf of the estate, gather and value assets, pay approved debts and taxes, and distribute what's left to heirs or beneficiaries.
If you pass away with your assets titled only in your name and without a built-in transfer method, probate is the path that allows those assets to pass to the next owner. However, not everything requires probate. Assets with a named beneficiary, certain jointly owned property, and accounts set up to transfer on death may move outside the court process.
However, probate may still be required for remaining items, disputes, missing documents, or situations where a clear legal transfer is needed.
How Trusts Can Benefit Your Estate Plan
A trust is a legal arrangement where property is held and managed for a named beneficiary under strict written terms. Living trusts allow you to maintain ownership of the assets in the trust while you are alive, outline who will manage them if you become incapacitated, and direct how they will be distributed or used after your passing. The primary benefits of setting up a trust include the following:
Revocable living trust: Trusts are often used to hold your assets during life and pass them to the named beneficiary after your passing. This typically reduces the need for probate for any assets titled in the trust.
Trustee management during incapacity: You can grant a successor trustee the authority to handle your trust property if you can't manage it yourself. This often does not require court involvement.
Distribution rules for beneficiaries: Trusts allow you to set timing and conditions for distributions, such as age-based releases or ongoing management for a beneficiary who needs support.
Privacy planning: Trust terms generally don't become part of a public court file in the same way probate filings can, which you and your family may prefer.
A trust doesn't replace other estate planning tool and it doesn't automatically control everything you own. For a living trust to work as intended, the assets you place in the trust generally need to be titled into the trust or coordinated with it through clear beneficiary designations.
How to Minimize Probate Without a Trust
In many cases, it's common to want a simpler plan that reduces the need for probate where it makes sense. To do so, consider updating how accounts are titled, how your beneficiaries are listed, and whether any transfer-on-death features are available and appropriate. Some common probate-reduction tools you can use include:
Beneficiary designations: Retirement accounts and life insurance typically transfer to named beneficiaries, so it's essential to keep those designations current.
Payable-on-death and transfer-on-death options: Some financial accounts allow a beneficiary to receive funds directly after death, depending on the account instructions.
Joint ownership: Certain jointly held property may pass to the surviving owner, though this depends on the form of ownership.
Gifting during life: In some situations, lifetime gifting can reduce what remains in your probate estate. However, it could potentially raise tax, control, and fairness concerns if not done properly.
These tools work well when they align with your goals and overall objectives. However, problems can occur if your beneficiary forms point one way, will points another, and family members have different expectations about what was intended. If you're deciding between a trust-centered plan and a probate-centered plan, reach out to an experienced estate planning attorney for guidance.
Which Options Should You Choose?
Probate and trust planning each have advantages and limitations. Probate provides a structured court process with formal authority and oversight, which can be useful if there are disputes, unclear ownership, or creditors that must be addressed in an orderly manner.
However, probate involves numerous court filings, timelines, and a level of public visibility that some families would rather avoid. The right question usually isn't whether probate is good or bad, but whether it fits the situation you're planning for.
Trust planning can streamline your estate administration for any assets held in the trust and may reduce the need for court involvement. However, it requires considerable upfront work, careful drafting, and ongoing maintenance, including keeping titles and beneficiary designations up to date.
To decide which option works best for your situation, create a clear inventory of what you own and how it's titled. Then consider who you would like to manage your estate and make decisions on your behalf if you are unable to do so yourself. For example, consider whether you want distributions made quickly or staged over time, and whether privacy is a meaningful concern for your family.
It also helps to consider blended-family planning, beneficiaries with support needs, or scenarios where clear guardrails can help preserve a beneficiary's inheritance. Those factors can help you decide between a trust, a will-based plan with targeted probate avoidance tools, or a combination of both.
Reach Out to an Experienced Tennessee Estate Planning Attorney Today
Estate planning is important, but it doesn't need to be a hassle. If you're torn between a trust-based or probate-based approach for your estate plan, an experienced estate planning attorney can help you explore your options and determine the best solution for your circumstances.
At Brazil Clark, PLLC, we are skilled in drafting comprehensive estate plans for our clients. Located in Nashville, Tennessee, we serve clients throughout Rutherford County. Contact us today to schedule an initial consultation.