Should I Create a Trust to Avoid Probate?
Avoiding probate is a common reason for creating trusts. One thing to note is that only a funded trust will avoid probate. Meaning, only assets that have been transferred and titled in a trust will avoid probate. When properly funded, the trust document and not a Will controls the disposition of the assets and avoids the necessity of opening a probate estate. With the exception of pre-tax retirement accounts or accounts with valid beneficiary designations, assets not titled in the trust will be required to pass through the probate process.
However, in New Mexico, probate is unusually simple, fast, and fairly inexpensive compared to the probate process in many other states. Probate in most other states can be complicated, slow, and very expensive. Therefore, if a client owns property in his or her own name in another state, such as a cabin in Colorado, or mineral rights in Arkansas, we commonly recommend creation of a trust to hold that asset in order to avoid probate in the other state.
If the only reason that a client wants to create a trust is avoiding probate in New Mexico, we do not always recommend a trust. Trusts are not the best solution for everyone and it is important to understand what your options are and what is best for you and your family.
Contact an estate planning attorney or one of our attorneys to discuss your estate planning needs.