When You Have a Trust, Do You Still Need Probate?
Many people create trusts to avoid probate and ensure a smooth transfer of assets after death. However, what many trustees don’t realize is that just because assets are in a trust doesn’t mean you can immediately distribute them without risk. Florida law allows creditors to file claims for up to two years after the decedent’s death—unless probate is opened to shorten this window.
Do You Need Probate If You Have a Trust to Protect Against Creditor Claims?
Even when assets are placed in a trust, creditors still have the right to seek payment for outstanding debts. If you, as the trustee, distribute assets before this creditor claim period ends and a valid claim is later filed, you could be personally liable for those debts.
Do You Need Probate If You Have a Trust to Shorten the Creditor Claim Period?
If no probate is filed, creditors have two years from the date of death to make a claim. However, filing a probate administration can reduce this timeframe to just three months. Here’s how it works:
Without Probate
Creditors can file claims for up to two years. If a trustee distributes assets early, they risk being held personally liable for unpaid debts.
With Probate
Filing a probate administration shortens the creditor claim period to three months after proper notice to creditors is published. Once this period expires and valid claims are addressed, the trustee can distribute assets with confidence.
Should You File Probate If There’s a Trust?
While avoiding probate is one of the primary reasons for creating a trust, sometimes filing probate in addition to trust administration is the smarter option. Most trustees choose to file probate to:
- Reduce Risk: Shortening the creditor claim period minimizes liability for the trustee.
- Clear Assets for Distribution: Once the three-month period ends, assets can be distributed without concern.
- Legally Cut Off Late Creditors: Any creditors who don’t file within the shortened probate timeframe are barred from making future claims.
What Should Trustees Do?
If you are administering a trust and unsure about creditor claims, consider the following steps:
Consult an Estate Attorney
Understanding the legal risks is key.
Evaluate Whether Probate is Necessary
Filing probate may be the safest option, even if a trust exists.
Wait Before Distributing Assets
If no probate is filed, delaying distributions until after the two-year period may be wise.
Final Thoughts
A trust doesn’t automatically eliminate creditor claims. Trustees should be aware of the two-year creditor claim period and consider whether opening probate is beneficial to shorten this timeframe. By taking the right steps, you can protect both the trust assets and yourself from unnecessary liability.
Lori Vella is an Estate Planning and Business Attorney. She works virtually throughout Florida and New York, but has her home office in Tampa, Florida. She is mom to a little boy which ignited the passion for helping other families. She and her son enjoy car rides, playgrounds and taking mini-adventures. They also have an organic garden that surprisingly yields vegetables. Lori considers herself well-versed in Seinfeld and welcomes any trivia!
Disclaimer: The Law Office of Lori Vella’s website contains general information directed to Florida residents. This firm does not intend to give legal advice through its pages and/or blog. If you need legal advice, we encourage you to find an attorney licensed in your state. This language on this website does not create an attorney-client relationship between you and this firm.