Using Revocable Trusts to Protect Your Family’s Assets and Privacy

Many families are surprised to learn how public the probate process really is. When an estate moves through an Indiana probate court, the Last Will and Testament becomes a public record. The personal representative is also required to provide certain information to the court. This means beneficiary names, asset information, and other sensitive details may become part of the public record. 

Establishing a trust may be the best option for families owning property in multiple states, families whose assets will be distributed over a period of time, high net worth individuals concerned about federal estate tax, or anyone who just wants to keep the details of their estate private. 

Parr Richey’s estate planning attorneys help Indiana families determine whether a trust should be included as part of their overall estate plan. There is no one size fits all approach in determining whether a trust is a helpful estate planning tool. Our approach is tailored to your family’s needs and circumstances. 

How a Revocable Living Trust Works

The most common trust agreement we prepare for clients is a Revocable Living Trust. This is a legal document that holds your assets during your lifetime and after your death. Unlike a traditional Will, a trust takes effect as soon as it is signed and funded. The assets are managed by a trustee. In most cases, you serve as the initial trustee, retaining full control over your accounts, investments, and property just as you did before.

This kind of trust remains flexible throughout your life, meaning you can change it or dissolve it entirely if your circumstances change. Because the trust, rather than you individually, holds title to these assets, they are not considered probate assets. That means your estate is usually settled privately, outside of court.

Funding the Trust and Ongoing Administration

Any trust only functions properly if it is funded. This means that you must retitle your assets in the name of the trust or name the trust as the beneficiary of the asset. We can prepare Indiana deeds to transfer real estate into a trust, and help you fill out the paperwork to retitle your other assets, if necessary. If the trust is never funded, it is likely your estate will be administered through the probate process. 

Trusts also provide continuity if you become unable to manage your own affairs. Your named successor trustee can step in to pay bills and manage investments without a court order, following the instructions you set out when the trust was created. A trustee is a fiduciary who has an obligation to carry out the terms of your trust, responsibly manage and invest your assets, and make decisions in your best interest. The trust agreement explains the responsibilities of the trustee. 

After your death, the successor trustee follows the directions in the trust to distribute your property. Sometimes the distributions are made immediately and the trust is terminated. Other times, the trust exists for many years and the beneficiaries receive distributions over time. In this situation, the successor trustee will continue to invest and manage the assets for your beneficiaries.

Common Questions About Indiana Trusts

Do I need a trust to avoid probate?

Not necessarily. Many of our clients are able to avoid probate by naming beneficiaries on their assets and recording a transfer on death deed. Jointly-held assets, like bank accounts, are also not considered probate assets since they pass to the surviving owner. However, a trust is another way to avoid probate because it takes your assets out of your individual name. 

There can be reasons to use a trust to avoid probate instead of beneficiary designations. This will depend on your particular circumstances and wishes, and we can help you determine which plan best fits your needs. 

How does a Revocable Living Trust fit into a broader estate plan? 

A trust typically works alongside a Will, general durable power of attorney, and advance directive as part of a complete estate plan. Oftentimes, your Will directs all probate assets to be distributed under the trust. We prepare these documents to work cohesively to carry out your wishes during your life and for your heirs afterward.

Are there other types of trusts?

Yes, there are several different types of trusts. We most commonly prepare revocable living trusts for clients, but certain situations call for irrevocable trusts, special needs trusts, charitable trusts, or another type of trust.  

Schedule an Appointment with Parr Richey

Trusts can be an important estate planning tool but may not be necessary depending on your circumstances. Call our office at 317-269-2500 or contact us online to discuss whether a revocable living trust would be a valuable addition to your estate plan.