A Guide to Privacy in Estate Administration: Trusts vs. Probate

When creating a revocable living trust or other estate planning documents, clients often ask how much of their information will be made public, and who will have access to it. It's important to understand the privacy implications of your estate plan, especially after your passing. This article will provide an overview of the privacy levels associated with different estate planning options.

Privacy During Your Lifetime

During your lifetime, you can generally keep your estate planning documents confidential. The real change in privacy levels occurs after your death when the estate is distributed.

Probate: The Public Process

If your estate goes through probate, whether or not you have a will, your documents become part of the public record. This is because probate proceedings involve court filings and require documentation of your assets, including account statements and property deeds. As a result, anyone can access this information if they choose to inspect the court records.

Revocable Living Trust: The Private Alternative

A significant advantage of a revocable living trust is its ability to keep your estate planning documents private. By avoiding probate, your trust remains a private document, and the administration of your estate takes place within the family rather than through the courts.

However, there are certain parties who have a right to see copies of your trust documents, including:

1. Heirs

2. Beneficiaries

3. Those you disinherit in the Trust

Although heirs and beneficiaries often overlap, there are instances where they differ. For example, if you disinherit a biological child, they are still technically an heir and therefore entitled to a copy of the trust document. The principle here is that anyone with an interest in the trust has a right to view it.

Institutions that May Access Your Trust Documents

In addition to heirs, beneficiaries, and disinherited parties, institutions like banks, life insurance companies, or those holding your 401k or IRA may also need to see your trust documents. Typically, they may already have these documents on file, or they may accept a "certification of trust." This certification provides a summary of the trust terms but omits sensitive details, such as the distribution of assets.

Protecting Your Privacy: The Revocable Living Trust

In summary, keeping your estate planning documents private during your lifetime is up to you. After your passing, a revocable living trust offers the most privacy, as it keeps the estate administration process out of the public eye. By contrast, probate proceedings are public, and all information filed with the court is available for inspection. To maintain privacy and ensure a smooth estate administration process, consider setting up a revocable living trust.

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