The main component of the estate plan for most people is a revocable living trust that they establish during their lifetime. A properly drawn and funded revocable living trust will enable the surviving spouse and family members to avoid probate, the formal court supervision of an estate proceeding. The most common reason given for wanting to avoid probate is the cost of a probate proceeding. Since the court supervises the probate process from start to finish, significant administrative costs and fees are incurred. These would include fees of the personal representative, fees of the attorney, filing fees and court costs. However, what, if any, other reasons are there for wanting to avoid probate?
Another major reason to avoid the probate process is confidentiality. An estate file is a matter of public record. A review of someone’s estate file will reveal the terms of the Last Will And Testament of the decedent including:
Although one can seek an Order sealing an estate file, obtaining such an Order is difficult and is somewhat unusual in estates in recent years.
Contrast the non-confidentiality of a probate proceeding with the confidentiality of a trust administration. A court does not supervise a trust administration. Accordingly, there are no filings with the clerk that become a matter of public record. Under Nevada law, the Will of a decedent is required to be lodged with the Clerk and becomes a matter of public record; however, the dispositive provisions of a Will in a revocable living trust situation merely provide that any estate asset is “poured over” into the trust. The trust agreement itself is not made a matter of public record. For a court in Nevada to become involved with a trust administration, the court has to formally agree to assume jurisdiction of a trust via court order. Courts in Nevada have more than enough to do, and do not want to assume jurisdiction of a trust unless it is absolutely necessary to do so. Examples of this would be for the court to construe the terms of a trust agreement that are ambiguous and open to more than one interpretation, misconduct by a trustee, and a challenge to the validity of the terms of the trust agreement.
In summary, a primary reason for utilizing a revocable living trust in order to avoid the probate process is to maintain the confidentiality of one’s estate plan.