The process of estate administration should be considered when you are planning your estate, because your understanding of it will impact the choices that you make.
A lot of people just blindly assume that a last will is the right asset transfer vehicle to utilize unless you are super rich. It can be a suitable choice when the situation is extremely simple, but you will find that there are better alternatives when you get all the facts.
If you do use a will, you would name an executor or personal representative in the document. This is the person or entity that would act as the administrator after you are gone.
One of the first orders of business for the executor will be to identify and inventory the assets that will comprise the estate. This can be easier said than done when there are many different piece of property, and ownership documents must be tracked down. Financial accounts and all relevant material associated with them must be identified as well.
Many laypeople never think about the logistics that are going to become relevant during the estate administration process. They simply execute a last will and assume that the executor will find a way to handle all the administration tasks. These folks never try to put themselves in the shoes of the executor.
The Probate Factor
When a will is used, it is admitted to probate, and the court provides supervision during the estate administration process. Even if the executor was to have everything in order in a relatively short period of time, there would still be a waiting game.
Probate will typically take nine months to a year to run its course. No inheritances can be distributed while the estate is being probated, and this is less than ideal.
We are not trying to paint an unrealistic picture. Executors have been able to manage, even if there are challenges, for generations. Plus, a probate lawyer can be brought in when necessary, so they can find a way. Still, inefficiency is what it is, and you have another viable option.
Revocable Living Trusts
There are many reasons why a revocable living trust can be a better choice, but we will focus on one element here. When you establish a living trust, you can act as the trustee and the beneficiary while you are living. In the trust declaration, you name successors to assume these roles after your passing.
You fund the trust by making the trust the owner of the property that will eventually comprise your estate. There is no reason to be concerned about losing access to the resources, because you would still have total control. In a real sense, nothing changes with regard to your ability to do anything you want to do with these assets.
When the time comes, the trustee will not have to do a lot of searching to gather up all the different property that will ultimately be distributed to the heirs. It will all be in the trust, and this will greatly streamline the administration process.
There is even a way to account for assets that may have been in your personal possession at the time of your death. You can include a pour-over will, and this will allow the trust to absorb these resources.
Access Our Estate Planning Worksheet
We have developed a very useful worksheet that you can go through to gain a more thorough understanding of the estate planning process. This resource is being offered free of charge, and you can visit our worksheet page to gain access to your copy.
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If you are ready to discuss your estate planning objectives with a licensed attorney, we are here to help. Our attorneys are offering consultations using remote technology, so you can get the same level of service without taking any risks.
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