When you engage in any form of financial planning, you are naturally going to do your homework. You do not make assumptions, because the stakes are high. The same logic should be applied to estate planning.
Transferring everything that you have been able to accumulate throughout your life to your loved ones is a very important matter. You should understand all the facts so that you can be certain that you are providing for your family in the optimal matter.
With the above in mind, let’s look at the process of probate.
Estate Administration
Estate administration does not happen in a vacuum. If you use a will to state your wishes regarding asset transfers, the will must be admitted to probate before anyone can receive inheritances.
This process comes with a few different pitfalls. For one, it opens the door for anyone who wants to challenge your estate.
Secondly, it is a public proceeding. Anybody who wants to probe can access probate records to find out how you distributed your resources.
Time consumption is another factor to take into consideration. As we stated previously, nobody receives anything until after the probate process has run its course. It will take a number of months at minimum, and complex cases can take much longer.
Lastly, there are some considerable expenses that typically accumulate during the probate process.
Avoiding Probate
You can be proactive about the implementation of probate avoidance strategies. The best way to proceed will vary depending on the circumstances.
Revocable living trusts are often used by people who want to avoid probate. With this type of trust you can act as the trustee and the beneficiary while you are living. You name successors to take over these roles after you die.
When you do in fact pass away, the successor trustee will follow instructions that you leave behind in the trust agreement. Assets will be distributed to the successor beneficiaries in accordance with your wishes, and the distributions would not be subject to the probate process.
These trusts can be beneficial for a wide range of people, but there are other probate avoidance tools that can be utilized. Some of them address multiple different objectives, such as estate tax efficiency and/or asset protection.
There are also some very simple ways to avoid probate. Life insurance proceeds are not subject to the probate process, and assets in a payable on death account would be transferred to the beneficiary outside of probate.
Joint tenancy can also be used to transfer property free of the probate process. A joint tenant is a co-owner of property.
Free Report on Probate
To learn more about probate and probate avoidance strategies, download our special report. This report is free, and you can access your copy through this page: Southampton PA Probate Report.
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