Estate planning – when done correctly – should accomplish more than just planning for the distribution of your estate assets when you are gone. In fact, your estate plan should take numerous inter-connected goals and objectives and blend them into one comprehensive plan. For many people, probate avoidance is one of those goals. The Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC explain why you might want to include probate avoidance tools and strategies in your estate plan.
What Is Probate?
Probate is the legal process that is typically required after the death of an individual. Probate is intended to serve several functions, including the authentication of a Last Will and Testament submitted on behalf of the decedent. Probate also serves additional functions, such as:
- Identifying, securing, and valuing assets
- Notifying creditors of the estate and providing an opportunity to file claims against the estate
- Identifying and locating heirs of the estate
- Litigating any challenges to the Will or disputes with creditors
- Paying federal (and state in some cases) gift and estate taxes
- Transferring the remaining estate assets to the named beneficiaries and/or legal heirs
Why Is Avoiding Probate Desirable?
There are several reasons why probate avoidance is such a common estate planning objective. To begin with, probate is a lengthy process. Creditors of the estate are given four months to file a claim against the estate in Vermont. Practically speaking, it will take a minimum of six months for almost any estate to make it through the probate process. The more complex your estate assets are and/or the more valuable your estate is, the longer it may take to get through probate. Moreover, any challenges filed with the court could extend the time necessary to complete probate by months or years. Keep in mind that probate assets cannot be distributed to the intended beneficiaries until the end of the probate process, meaning your loved ones could be forced to wait a long time before receiving their inheritance.
Cost is another reason to avoid probate. Everyone involved in the probate process is entitled to compensation. This typically includes the Executor of your estate, accountants, attorneys, appraisers, and real estate professionals. Those expenses are paid out of your estate, meaning the value of the estate that is finally passed down to your loved ones may be considerably less than what you left behind after all those bills are paid.
Privacy is yet another reason people often aim to avoid probate. Once your Last Will and Testament is submitted to the appropriate probate court it becomes public record. Consequently, the terms of your Will also become easily accessible. For anyone who prefers to keep the details of their estate plan private, avoiding probate is a must.
Can My Estate Avoid Probate?
There are numerous estate planning tools and strategies that can help your estate avoid probate. The most important probate avoidance tool for many people is a trust. Unlike gifts made in your Will, assets held in a trust do not go through probate. Consequently, the terms of the trust agreement can dictate that those assets be disbursed as soon after your death as you want. Moreover, a trust can also provide incapacity planning benefits as well as be used to protect the inheritance of a minor child until he/she reaches the age of majority.
Another probate avoidance strategy involves converting probate assets to non-probate assets. Changing the way assets or accounts are titled will often convert a probate asset to a non-probate asset. Titling real property jointly with rights of survivorship, for instance, allows that property to pass directly to the co-owner, outside of the probate process, upon your death. Consult with your estate planning attorney about the best way to ensure that your estate avoids probate.
Contact Essex Junction Estate Planning Attorneys
For more information, please attend one of our upcoming FREE webinars. If you have questions or concerns about including probate avoidance in your estate plan, contact the experienced Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.