This is the second part in a series of blog posts that compare wills and trusts in the following areas: 1. Cost, 2. Post-Death Process, 3. Getting Money to Minors, 4. Maintenance, 5. Family Situation, 6. Taxes, 7. Asset Protection, 8. Later Acquired Assets.

Pt 2. Post-Death Process

There are generally two post-death processes: probate or trust administration. 

Probate

In Utah, probate occurs if you die with assets in your name of over $100,000 and/or any real property (house, lot, mineral rights, etc.). This is true whether or not you have a will. A will alone does not avoid probate, it does, however, organize the probate and generally makes it more efficient.

There are a few complicating factors to the $100,000 threshold. For example, many people have beneficiary designations on their accounts, this moves those accounts out of the estate, and  they do not contribute to the $100,000 threshold. Additionally, if you have joint bank accounts, or if other people are on title for a property with you (i.e. held in joint tenancy not as tenants in common), then those joint assets wouldn’t be subject to probate at all. BUT before you run out and start adding your adult kids or other relatives to your properties, in hopes of avoiding probate, bear in mind that there are some important tax considerations and legal ramifications to that action. Hint: it is not such a great idea to share joint tenancy title with anyone besides a spouse.

That said, probate, in Utah at least, really isn’t awful. Utah offers an informal (i.e. no hearings) probate process and a formal probate process (hearings). The bulk of probates are informal, but if there is family disagreement, probate is formalized. Additionally, the turn around from filing the paperwork for an informal probate to the court extending power to the executor to begin  probate is generally no more than 2 weeks. In a formal probate, this extension of power requires a hearing, so the wait is longer. However, once power has been extended to the personal representative, the process is much the same for a probate or a trust administration. 

Trust Administration

The main difference between trust administration and probate is that in a trust scenario, assuming that all assets were properly titled in the trust prior to your death, no probate is triggered, because no assets remain in your name. Thus, nothing has to be filed with the court, and you can get right to work on administering the estate. 

Length of Process

It is difficult to say exactly how much time either process will take, but probates cannot be less than 4 months in Utah, and are usually more like 9 months to a year. Trust administration has no minimum, and can take just as long because some of the same lagging factors apply. For example, both require filing taxes with the IRS and settling debts with creditors, but in general, trust administration is faster because you aren’t waiting on the court. So I would say 3 months to 6 months for trust administration. 

Of course all of this is very much premised on what kind of assets you have, how quickly they can be liquidated, and whether their titling is complex at the time of your death. 

But  never fear, whether you die with a will or a trust, there are provisions in place to ensure that estate funds would be available to care for your minor children in the interim (see https://le.utah.gov/xcode/Title75/Chapter2/C75-2-P4_1800010118000101.pdf). 

Winner of Post Death Process: Properly Funded Trusts … BUT an incorrectly funded trust and a probate rank the same, so something to keep in mind. 

But Rebekah, what does funding the trust mean? I’m glad you asked!!!! Let me give you an example: Let’s say you set up a trust and change the title of your house so that it now reflects your trust owning your house instead of your personally (i.e. deed your house into trust), but a few years later, you refinance your home. You need to ensure that the new deed puts the refinanced property back into the trust. If you don’t, then your trust won’t be properly funded at your death and you’d end up with a probate. Make sense?