Does a revocable trust avoid probate? The answer is maybe.

A probate is necessary to transfer assets to the deceased person’s heirs (commonly referred to as the decedent) if assets are in the name of the deceased person at his or her death.  Since the early 1980s, estate planners have sold trusts as a way to avoid probate.  Transfer the assets to the trust during the decedent’s lifetime, and then at the decedent’s death no probate is necessary - maybe. 
However, in Florida one purpose of probate is to cut off creditors.  The personal representative (appointed by the court to administer the decedent’s estate) publishes notice to creditors in a local paper.  The creditors have 90 days to file a claim with the probate clerk or the claim is invalid (some exceptions to this rule apply).  If no creditor claim is filed within two years of a decedent’s death, then the claim is forever barred (except for secured claims such as a mortgage).

If the decedent’s heirs don’t open a probate (i.e., because they don’t want to provide a forum for creditors to file a claim) then the creditor can open a probate. There is no method currently for a trustee to publish a notice to creditors.  Thus, if you are a trustee of a trust that is required to distribute all assets, and you are not familiar with the decedent’s finances, then the prudent thing to do once a decedent has died is to open a probate to see if there are any claims.  Otherwise you could distribute the trust assets only to find there is a creditor claim that you as the trustee are responsible for.  Of course you could wait two years until the claims period has expired, but that really would not make the trust beneficiaries very happy. 

There are other reasons why a trustee would want to open a probate.  For more information contact Linde Law Group today.

Matthew A. Linde
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