Although many of the same steps are involved in probate and trust administration, there are a few important differences in these two ways to settle a deceased person’s estate. Probate is a court-controlled process that is required to transfer assets when assets are in the deceased’s name only. An executor is named to present a list of all the deceased’s holdings to the court, who will then subtract any outstanding debts from the estate before releasing the rest to beneficiaries. Some of the disadvantages to probate are that the proceedings are public record, it is often expensive, and it can take a long time before assets are distributed.
A living trust allows assets to be transferred without going through probate. If a loved one has assets in a trust in his sole name and he becomes incapacitated or passes away, the assets immediately come under the control of the successor trustee named in the trust agreement. The court is not involved since the “owner” of the assets has not changed—the trust is still the owner—allowing the estate transactions to remain private. In addition, the new trustee can access accounts immediately, making trust administration typically shorter and less expensive than probate. However, the trustee is legally responsible for the management and distribution of trust assets, and the trust must have been properly funded to avoid probate proceedings.