Without establishing a proper estate plan, your loved ones will have to go through probate. While you probably know many people who have gone through it and survived the process, it more than likely was not the most efficient process for them. Additionally, after your passing, your family members will need to grieve, so avoiding probate can be a great gift. An article from Forbes, “7 Big Estate Planning Mistakes – Not Avoiding Probate”, details why failing to ensure your estate avoids probate is a mistake.
First, as mentioned above, probate generally is not efficient; it is time consuming as well as expensive. Plus, if your loved ones live in a different state, the laws that they may be familiar with could be different than in the state of your passing. Additionally, if you own assets in more than one state, this could mean separate probate procedures for the different assets. In recent decades, many states have adopted more streamlined and cost effective probate procedures, yet this pertains more to estates of lesser value, and still other states are still stuck in their old probate processes. Not only can probate take up your time, is can all disrupt how your assets were managed while you were living. The disruption can add to the strain your beneficiaries are already experiencing and leave them unsure of when they will receive their inheritance, and create uncertainty about how much they will receive in the end.
Another thing to consider is that probate is public. If you’re a private person and wish to keep your affairs private, then probate is definitely something to avoid. Anyone can go through probate court records and see for themselves how much your estate was worth and see what you owned, owed, and who you distributed your estate to and how. There are assets that by operation of law avoid probate like retirement accounts, annuities, life insurance, and property that is owned jointly. Yet, all your other assets will not. While some see it as a positive that there will be a public record of how their estate was handled, anyone who disagrees with the way the estate is being handled can file a complaint, this can be a positive or negative depending on your view, but it makes the process take longer. Another positive or negative is that through the process of probate, title to assets will be certified, and challenging ownership becomes more difficult.
Unfortunately, most estates are at least partly subject to probate and partly probate because it is not an all-or-nothing choice. So, when planning your estate it comes down to how much of your estate you want to avoid probate.
Transferring your assets into a trust, usually a revocable living trust, is the easiest way to avoid the bulk of probate. Talk to your estate planning attorney about the probate process in your area and about establishing a trust to ensure your loved ones will not have go through a longer than necessary probate process after your passing. This will give them more time to grieve instead of going through court. While probate isn’t always bad, there are many different steps you can take to make sure your beneficiaries act in accordance with your estate plan and having an effective estate plan is always more efficient than probate.
For more information on this and other estate planning topics, explore our blog and visit our website today to schedule your consultation today!
Reference: Forbes (February 26, 2018) “7 Big Estate Planning Mistakes – Not Avoiding Probate”
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