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Thursday, January 1, 2015

The Ins and Outs of Probate for Genealogists - Part Eight - Avoiding Probate with Trusts

As I mentioned at the beginning of this rather long series of posts, due partially to excessive attorneys fees and also due to the time involved in probating an estate, several alternative methods of "avoiding probate" have been developed. Unfortunately, the idea of avoiding probate with its attendant ills, has been replaced by the potential for even more complicated and costly litigation. If family members are going to fight, they will fight regardless of the formalities of the structure of the estate.

In this regard, trusts have been touted as the way to avoid probate. This may be correct in some limited cases, but in reality, trusts are used more as tax planning devices rather than mere probate avoidance devices. Genealogists need to know that trusts have been in existence for hundreds of years. Unless your ancestors were rather wealthy, they were unlikely to use a trust as an estate planning device until within the last 50 years or so.

This does not mean that looking for a trust is not necessary, it just means that the chances of finding one for the average family before about 1940 are slim. In addition, unless there was a disagreement and litigation, trust documents are usually private and finding one may not be easy. A copy of the trust documentation might be kept with other valuable family documents and it is possible that a search of family documents may turn up a copy of a trust.

However, as I mentioned, trusts have been around for a very long time. Trusts were first used in England at the time of the Crusades in the 12th Century. The idea of a trust is that the title to property is conveyed to another person with strict instructions on the use of the property. At the end of the trust period, ownership of the property reverts to the original owner. The original owner who coveys his or her property into a trust is called the Trustor. The person receiving the property and holding it for the benefit of the trustor is called the Trustee. The person receiving the benefits of the trust, i.e. distributions or income, is the Beneficiary. In many cases, the Trustor and the Beneficiary are the same person. In most modern cases, the Beneficiaries are the heirs of the Trustor. This type of trust is generally referred to as a Testamentary Trust. Trust documents can be very elaborate and complicated. Even a so-called "simple trust" can run 20 or 30 pages in length.

It is nearly impossible to generalize about the genealogical value of trusts since they vary so considerably one to another. I suggest looking carefully at any documents you are able to find that talk about your family and if you find some with "legal language" that you take the time to use Black's Law Dictionary to figure out what they say to see if any of the information is valuable.

Stay tuned for the continued parts of this particular post in the series on probate.

The Ins and Outs of Probate for Genealogists - Part One - In the Beginning
The Ins and Outs of Probate for Genealogists - Part Two - Where there is a will there is a way
The Ins and Outs of Probate for Genealogists - Part Three- Understanding the Language of a Will
The Ins and Outs of Probate for Genealogists - Part Four - What is Probate?
The Ins and Outs of Probate for Genealogists - Part Five - What are Probate Procedures?

Note: Part Seven has several subparts containing an example of a complete probate file with explanations. 

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