Revocable Trusts Avoid Probate – BUT SOMETIMES YOU SHOULD PROBATE THEM ANYWAY
I know, it sounds like lunacy. Your loved one created a Revocable Trust for the purpose of avoiding the cost and red-tape of probate. But there are some instances when you, the Trustee left in charge after the death of the Grantor (who created the trust), should consider filing a probate anyway. The instance is when you need to cut-off or diminish potential claims against the Trust.
One scenario is this: prior to the Grantor’s death, he was involved in a motor vehicle accident. Even if the Grantor doesn’t appear to have been at fault, a lawsuit might still yet be filed claiming that he was at fault and seeking money. I am not suggesting that every fender bender be considered a problem large enough to warrant filing for probate, but if it was a serious accident with possible injuries, filing a probate sets at short window within which a claim would have to be filed in order to recover from the Grantor’s personal assets held by the Trust that you are now in charge of.
Other scenarios are as follows: The Grantor suffers a protracted illness or even if short, an expensive one, mounting up enormous bills. Or the Grantor is a spend-thrift and had a lot of credit card or other debt.
Probating the Grantor’s estate can be a way to manage, lower, or even eliminate creditor claims against the Trust Estate. Any situation where there are a lot of debts merits looking at probate as a way to deal with these debts. You may decide not to file, but considering probate and, perhaps, talking with a probate lawyer about this, is something a Trustee must consider in order to do his or her best at administering the Trust.