The transfer of the property from the creator to the trust does not create federal gift tax consequences. In order to avoid gift tax consequences, however, the trust must remain revocable. One of the most frequently cited reasons for creating a Living Trust is probate avoidance . Probate is the process by which the Courts determine what assets the person owned at death. The Probate Court also determines the payment of taxes and debts and distributes the property according to the terms of the will or according to the terms of state statutes if there is no will.
Probate is a time consuming process that can often take in excess of one year.
This process serves to delay inheritances that will eventually be received by the beneficiaries of a will. Probate is also an expensive process. The cost is primarily due to the involvement of lawyers and the courts in the probate process. The executor of the estate may also be paid out of the estate funds in a probate proceeding. Often the lawyer and the executor each receive a payment equal to two or three percent or more of the total assets of the estate.