Why avoid probate?
Probate is the way that your estate is “wrapped up” after your
death. It can be a long, complicated, inconvenient, and
expensive process for many families. The major steps of the
probate process include:
1.
Filing a petition and gathering information
2.
Publishing notice to creditors
3.
Asset inventory and appraisal
4.
Payment of debts, claims, and taxes
5.
Final distribution and closing of estate
Probate generally takes at least one year to
complete, and for some estates, it can take many years. During
this time, assets may be unavailable to the intended
beneficiaries, and much legal expense is incurred. Probate
expenses can be as much as 7% of a decedent’s estate.
Wouldn’t you rather have your intended
beneficiaries have the property you left them right away,
without paying these unnecessary expenses?
In addition, probate proceedings are open to
the public. Anyone can obtain your probate file and access
confidential information about your financial affairs, and your
beneficiaries.
Additional probate proceedings must take place in other states,
as well, should the decedent own real estate in another state at
the time of death. This means that legal counsel will need to
be retained in these states, resulting in further expenses.
How can you avoid probate?
Probate can
be avoided by creating and funding a living trust during your
lifetime. After the trust is created, you title your assets in
the name of the trust. All assets held in trust name at your
death will avoid probate.
The instructions that you set forth in the trust will govern how
your assets are managed and/or disbursed in the case of your
incapacity or death. Should you become incapacitated prior to
your death, the named successor trustee will manage the trust
assets as set forth in the trust document. You also can revoke
or change the trust at any time prior to your death or
incapacity.
Using a living trust protects you from probate, protects you and
your family in case of your incapacity, remains a private affair
vs. being a matter of public record, and in some cases, can
assist you in minimizing or eliminating estate tax.
Beneficiary designations and certain forms of ownership can also
avoid probate. However, using these techniques should be
carefully considered. Use of these techniques can leave assets
subject to unnecessary creditor attack and other risks.
Call us for a free consultation to learn more about how you can
avoid probate, and pass your assets efficiently to your intended
beneficiaries. |
