Do Assets in a Trust Have to Go Through Probate?

DO TRUST ASSETS HAVE TO GO THROUGH PROBATE?

Sometimes.

The answer depends on a number of factors, including (but not limited to);

• the type of trust
• the type of assets
• whether the assets were properly placed in or transferred to the trust
• and several other, less common, legal issues

PROPERTY HELD IN AN INTER VIVOS TRUST GENERALLY DOES NOT GO THROUGH PROBATE

Assets that are held in a properly-established inter vivos trust (sometimes also called a “living trust”) generally do not have to go through probate. After the settlor dies, the successor trustee can administer the trust (often, without court supervision) and distribute the assets according to the terms of the trust.

However, there are exceptions, and in those cases, the assets do (or may) require probate. Some (but not all) of these exceptional situations include:

• when the assets were not properly transferred to or placed in the trust before the settlor’s death
• when assets that otherwise would be subject to probate “pour into” the trust through a provision in the settlor’s will
• when assets in the trust “pour back” into the estate of the settlor at the time of death (this is quite rare)

EVEN IF PROBATE IS NOT REQUIRED, COURT PROCEEDINGS MAY BE NECESSARY (OR PERMITTED)

Trusts may be subject to a number of different court proceedings, depending on a variety of factors, including (but, again, not limited to):

• The terms of the trust (which may require court supervision expressly, or by implication)
• Conflicts between the trustee and beneficiaries
• Appointment of successor or substitute trustees
• The trustee seeking official “instructions” from the court to resolve ambiguities or other questions
• Challenges to the trust or the settlor’s capacity to create it (known as “contest proceedings”)
• Proceedings to rescind the trust

Court proceedings involving trusts usually take place in probate court, which is the branch of the California courts that has jurisdiction over estates and trusts. However, not all proceedings in probate court are “probate proceedings” in the sense of a hearing or trial to determine who has rights to a decedent’s property.

When trust assets do, and do not, have to go through probate (or other court proceedings) is a complex topic, and highly fact-specific. Do not rely on this or any other online article to determine whether or not a trust or its assets need to be reviewed or ruled on by a court. Consult an experienced lawyer promptly any time you have legal questions, or want an assessment of your legal rights and claims. In the case of trust proceedings, and trust assets, you may lose your legal rights (or be subject to penalties) if you delay.

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Disclaimer: THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY, AND DOES NOT CONSTITUTE LEGAL ADVICE OR CREATE AN ATTORNEY-CLIENT RELATIONSHIP BETWEEN THE AUTHOR OR ROSS LAW AND ANY PERSON. Your legal rights and experiences may vary. Never use an online article (including this one) to evaluate your legal rights or claims. Consult an experienced attorney promptly to obtain a personalized evaluation of your claims, potential damages, and the various legal rights and options available to you.

You may lose or compromise your rights if you delay in consulting legal counsel. Most legal claims (and defenses), as well as legal and court procedures, are complicated and fact-dependent. If you believe you have a claim against someone who injured you, a lawyer who represented you in a previous lawsuit, or any other legal claim, consult an experienced lawyer immediately for an evaluation of your individual rights and claims.