Take Control and Avoid Probate
No one enjoys planning for what happens after they depart, but it is critical that individuals do so in order to maintain control of what happens to their estate. A proper Estate Plan will ensure that a deceased individuals’ family and loved ones are well taken care of and that what they leave behind is handled in the specific way they wish. As important as it is to draw-up an Estate Plan, most Americans avoid doing it.
What happens to those individuals who do not have a Living Trust or only have a will? The answer is that after they depart, their estate will have to go through a judicial process called probate. The probate process is expensive, time-consuming and public. It can also be emotionally painful for the family and loved ones of the deceased individual. The only way to avoid probate is by having a proper Estate Plan in place that includes a Living Trust.
A Will is Not Protection from Probate
Having a last will and testament can help an executor navigate the bureaucracy of Probate court by providing guidance as to a deceased individual’s wishes, but it will still require an executor to go through the laborious and stressful probate process. With a will, probate often takes more than a year.
For a deceased individual’s family and loved ones to avoid the many bureaucratic hurdles involved in the probate process, there must be an Estate Plan, which is a much more comprehensive document than a will. A proper Estate Plan will include a Revocable Living Trust, Pour Over Will, Durable Power of Attorney, and an Advance Health Care Directive.
Funds Freeze When an Estate is in Probate
During the period in which an estate is held in probate, the bank accounts, assets, and property are unavailable to the deceased individual’s family and inheritors. The beneficiaries of the estate can be left in a state of uncertainty and frustration as the estate is held to settle debts, taxes, and go through the routine government bureaucracy. The rest of the funds are only released when the court decides, and all pending matters are settled.
Assets in Separate States Complicate Probate
If a deceased individual owned assets or real estate in more than one state, things get even more complicated and drawn out. Each state has its own laws and regulations when it comes to probate. Attorney fees will begin to compound as an executor will have to navigate state specific rules and multiple probates
If an executor is from out of state or city, that person must go back-and-forth to attend court hearings, sign paperwork, and be present for any other court-supervised mediation.
This can be time-consuming, expensive, and cumbersome for anyone, especially a family member or spouse who is still grieving.
Are There Any Benefits to Probate?
The Probate court aims to ensure the fair, equitable administration of a person’s estate. The Probate court also establishes a platform for a deceased individual’s heirs, loved ones, family members, and others to bring a claim to the estate in an organized and supervised manner.
Although the government does attempt to do a fair and equitable job, the probate process is public, lengthy, and expensive for those who must go through it.
The Probate court can provide transparency and quell contests of your estate. Unfortunately, however, the Probate court requires all assets and executions of a will to be made a matter of public record, which eliminates any privacy.
The Probate court also notifies creditors and gives them a limited amount of time to make a claim. While this ensures that the process does move forward, it is still much slower than a Living Trust.
How to Avoid Probate
Setting up an Estate Plan that includes a revocable living trust is the only way to avoid probate. A Revocable Living Trust speeds up the distribution of assets and property, keeps matters private, and saves money that would otherwise be spent on the probate process.
For too long, Revocable Living Trusts were considered something that only the ultra-wealthy needed, but not anymore. Any individual who owns real estate, has $150,000 or more, or has under-aged children, should have a Revocable Living Trust.
A benefit of a Revocable Living Trust is that the creator of the trust can amend, revoke, or add to the trust as needed. Upon the death of the trust creator, the trust transfers seamlessly to the named beneficiaries without the need for probate.
The Final Ruling
Everyone should avoid putting their family and loved ones through the stressful process of probate. Probate requires a deceased individuals’ loved ones to go through reams of paper work, spend time in and out of courthouses, and take personal time to settle an estate.
Individuals need to find a trusted attorney who is well-versed and experienced in all aspects of Revocable Living Trusts and Estate Planning, and set-up an Estate Plan to safeguard their assets and wealth. With a proper Estate Plan, individuals maintain control and protect their families for years to come.