In our last post, we busted two of the three most common estate planning myths about only the rich needing estate planning and that you don’t need to plan because your spouse will get everything. If you didn’t catch that post, give it a read to learn why those statements are totally false! Today, let’s bust the third and fourth most common myths.
Myth #3: A Will Avoids Probate
Many people believe that once they have created a will—whether drafted by an experienced attorney or using a DIY solution or online form— they have avoided probate. Unfortunately, they are wrong.
While a will is a great way to designate a person to manage your affairs after you pass, determine who will get your hard-earned savings and property, and, if necessary, appoint a guardian to care for your minor children, this document has to be submitted to the probate court to begin the process of distributing your money and property. The level of involvement by the probate court can vary depending on the circumstances, but this process is not private, as the will becomes a matter of public record. If you only have a will, here is some of what could happen and what your heirs might go through:
A will needs to be approved by the court, a representative appointed, and the proper court procedures followed. This can often take anywhere from 3-5 months before a representative is appointed, depending on the type of probate required.
But remember, probate is dictated by the assets, not whether or not you have a will. The only assets that go through probate court are probate assets, which are assets owned in your name alone, not dictated by a contract. This means assets like life insurance or retirement accounts typically only go through probate if there were no beneficiaries named (these are examples of assets controlled by a contract). And any assets owned by a trust (a type of contract), will not have to pass through probate.
Myth #4: A Trust Avoids Probate
I know we just said any asset owned by a trust will not have to pass through probate, but it’s not trusts that avoid probate; it is assets aligned with the trust that avoids probate. This is why an ongoing care program is important.
In short, probate isn’t fun and it is a public affair that causes stress to loved ones who are already bearing the weight of grief in the wake of losing you. Don’t let the myth that a will is all you need cause your family the trouble of probate. And don’t forget that in order to be effective, you need to have your assets aligned with your trust, not just have a trust in existence. We are here to help answer any questions you may have about estate planning and avoiding probate through holistic ongoing estate planning. Together, we can craft a one-of-a-kind plan to ensure that you and your family are properly protected, and together, we can plan for life. Contact us today!