There is a legal process that can enter the picture when assets are being transferred after someone dies. The probate court presides over these matters, and you should know a bit about it when you are making inheritance planning decisions.
With this in mind, we are going to share five important pieces of information about probate in this post.
Wills Must Be Probated
If you express your final wishes in a last will, you would name an executor in the document to act as the administrator. The executor would not be allowed to act independently.
The will would be admitted to probate, and the court would supervise during the administration process.
Probate Is Time Consuming
Inheritances cannot be distributed until the court has probated and closed the estate. It will typically take about eight months at minimum in most jurisdictions, and if there are complications, it can take considerably longer.
Probate Isn’t Free
There are a number of different expenses that accumulate during probate. The executor is entitled to payment, and in some cases, a probate lawyer and an accountant will be engaged by the executor. Appraisal and liquidation fees can add to the red ink, and these expenditures reduce the value of the estate.
Probate Is Public
Most people conduct their financial lives confidentially. Privacy is important, but it is lost when an estate is probated.
Any interested parties can access probate records to find out what went on during the proceeding.
Probate Can Be Avoided
You do not have to shrug your shoulders and resign yourself to the inevitability of probate.
First, there are some types of asset transfers that take place organically outside of probate. For example, life insurance proceeds would go directly to the beneficiary, and the court would not be involved.
There are some other probate-free transfers, but we will not go into all of them here, because they are not very common.
You can proactively implement a probate avoidance strategy to steer clear of the negatives that we have looked at to this point. A commonly utilized probate avoidance tool is the revocable living trust. You do not have to be concerned about access to the funds that you convey into it, because they would be a readily available to you.
Even though you would be the grantor, you could act as the trustee, so you could change the terms at any time, and you could even dissolve the trust entirely if this is your choice.
You would name a successor trustee to assume the role after you are gone. This trustee would follow your instructions and distribute assets to the beneficiaries in accordance with your wishes. The transfers would not be subject to the probate process.
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Need Help Now?
If you have reached the point where you know that it is time to discuss your estate planning goals with a licensed attorney, we are here to help.
Our attorneys know how to put people at ease from the start, and we provide personalized attention. We can gain understanding of your situation, explain your options to you, and help you create a custom crafted plan that is ideal for you and your family.
You can send us a message to request a consultation appointment, and we can be reached by phone at 802-879-7133.