What is probate and why would you want to avoid it you may ask? This is the legal process by which a person’s estate is settled. It is during this process that the deceased person’s debts are settled and their property is distributed.
The problem with probate is that the national average length of a probate proceeding is 18 months! Even if it takes less time (3-8 months), it can still be too long.
It can also be very expensive. Typically, an attorney would have to be hired and could charge thousands of dollars for his or her time.
Think $1 million sounds like a big estate? It’s not uncommon at all for people to die with a million dollar estate. Remember, that everything is considered part of your estate. So if you add up the value of real property, bank accounts, IRA’s, 401ks etc, your estate would have to pay potentially very large attorneys fees.
Additionally, the person appointed as executor, would be entitled to compensation as well.
And, in the meantime, all of your property is tied up in probate.
This means that if you have a house or other property that you would want to go to your loved ones, they would have to wait to take possession of it or sell it.
…Meanwhile, there could still be a mortgage and taxes due that must be paid, even though your loved ones could do nothing with the house.
But with a living trust, because you have transferred title to your assets into the trust, you no longer legally own the assets. Your trust legally owns the assets.
Of course, you still have complete control over the assets and can change, amend or revoke your trust or any part of it at any time.
The result? You end up with a very flexible document where you have named trustees, who are responsible for managing the property in the trust, and also in charge of making sure your property is transitioned smoothly and efficiently to your loved ones (your beneficiaries)without the need for probate.
Doesn’t that sound like a win-win?
It also makes your estate plan a private event, rather than a public affair. If probate is involved, it becomes public record, inviting every creditor and family member (whom you may not want involved) to file against your estate.
Call today for a no obligation phone consultation and we can discuss your specific situation. We can talk about how I can help you put in place an estate plan that’s right for you and your family. Call or fill out the form on the right. I look forward to speaking with you soon!