Avoid Probate

Avoiding Probate -- is it for you?

Avoid Probate, is that right for you? Ideally, when a loved one passes away, the administrative and financial details fade into the background. That is possible when those details are addressed long before the passing occurs. Proper advanced planning gives the family the freedom to focus on grieving, remembering, and supporting one another in peace.

At its very core, estate planning is about creating peace of mind and ease of transfer. Long before the sad day occurs, it’s established how assets will be distributed and to whom.   

To achieve this, many individuals seek to save their loved ones from the stress, the expense, the delay, and sometimes the public spectacle that the probate process can sometimes bring. There are many strategies that one can use to avoid probate.  The most common among them is establishing a revocable living trust.  It is also the most effective and easily structured solution.

Avoid Probate -- Understanding the Basics

What is probate? Probate is a legal process where the court supervises settling a deceased person’s estate. During the process, the court validates the will (if there is one), appoints an executor or administrator (if there is none), ensures debts and taxes are paid, and oversees the distribution of any remaining assets.

Probate is not always necessary.  Often, people have a misconception that probate is always required.  The probate court only steps in when the deceased person’s assets were left in their individual name at the time of death. If all the assets are properly structured through joint ownership, beneficiary designations, or a trust, an estate can generally avoid probate.

Avoid Probate -- Key Strategies

• Joint Ownership. If property, such as bank accounts, real estate, vehicle ownership are held as joint tenants with right of survivorship, tenancy by the entirety for spouses, these structures permit ownership to automatically transfer to the surviving owner upon death. In other words, they avoid probate.
  
  
• Beneficiary Designations: Life insurance policies, retirement accounts, and annuities also avoid probate by transferring the product directly to a named individual—a designated beneficiary. This is done through a pay-on-death (POD) or transfer-on-death (TOD) form.
  
  
• Revocable Living Trusts: The most flexible option for estate planning.

Why a Revocable Living Trust is the Gold Standard

A trust is a legal instrument that holds title to your assets (accounts and property). It is managed by a trustee for your benefit during your lifetime and for your beneficiaries after you die. While you are alive and competent to serve, you can be your own trustee. You can then designate a successor to step into your shows when you die or are alive but unable to serve as a trustee.

How does a trust avoid probate? The beauty of a trust is it takes your assets out of your name as an individual and puts them in the name of the trust. There is no legal shift when you die. The successor trustee seamlessly steps in and carries out your written instructions without needing court approval. Therefore, the estate avoids probate.

Benefits of a Trust.

There are several benefits to establishing a trust, among them are:

• Cost. Probate can be expensive, in large part because of court costs. While setting up a trust requires a higher upfront cost than a will, it frequently saves families significant time, money, and stress down the road.
• Privacy. Trusts are private; wills are not private, since they must go through probate. Privacy is a concern of those who want to keep the terms of their estate plan away from the prying eyes of others.
• Efficiency. Minimizes legal fees, prevents lengthy court delays, and ensures uninterrupted support for your beneficiaries. A guarantee that the decedent’s wishes will b carried out.

Avoiding Probate – Not Always the Goal

While most families prefer to avoid probate, the process does serve specific purposes:

• Court Oversight. Provides strict court supervision if family conflict is expected or if a will's validity might be challenged.
• Creditor Resolution. An opportunity for creditors to get paid some portion (if not all) of what they are owed.
• Absence of a Plan. When the deceased didn’t have a trust, the court steps in to resolve any issues relating to distribution of assets.

However, for most people, the benefits of a trust outweigh the high court fees, long probate periods, and public exposure. In many jurisdictions, probate records are completely accessible exposing asset values, debts, and beneficiary details to anyone who looks.

Take the Next Step Toward Securing Your Legacy

The secret to seamless estate planning is working with a lawyer while you can still make decisions.  Come and discuss your unique family situation and financial goals. Let’s create a plan that is tailored to your needs.