You may equate estate planning with the creation of a last will. There is a widely held belief about a will. Many people think that assets can be transferred to the people named in the will immediately after the passing of the testator.
In truth, if you use a last will as your asset transfer vehicle, the will would be admitted to probate. The heirs could not receive their inheritances until after the estate was probated and closed by the court.
Probate can be defined as the legal process of estate administration. When someone passes away, there will usually be interested parties other than the inheritors. These would include the Internal Revenue Service, creditors, and people who were known to the decedent who were not named in the will.
All of these details are ironed out during the probate process. Creditors are given a chance to come forward seeking satisfaction, and final debts are paid. If anyone wanted to contest the validity of the will, an argument could be presented before the probate court.
After the final debts have been paid and the will has been deemed valid by the court, the estate administrator prepares the assets for distribution to the inheritors. The people named in the will receive their inheritances after the court closes the estate.
The Waiting Game
Will timely asset transfers take place when an estate passes through probate? The answer is a resounding no. A simple case can pass through probate in a little bit less than a year, but more complicated cases can take much longer.
Probate is not free by any stretch of the imagination. There is a filing fee, and the executor is entitled to payment. When you add in legal fees, accounting expenses, and liquidation charges, the process can consume a noticeable portion an estate.
Loss of Privacy
Probate is a public proceeding, so the things that take place become a matter of public record. This easily obtainable information can cause problems among family members, friends, and associates.
If you do decide to maintain direct personal possession of your property throughout your life and use a will to state your final wishes, a probate lawyer can help your executor navigate through the process. This can make things much easier, and you can arrange for the lawyer who drew up your will to act as the probate lawyer after you are gone.
Now that you understand the drawbacks that go along with the probate process, you may wonder if it can be avoided. Indeed, there are probate avoidance strategies that can be implemented. The best course of action will depend upon the circumstances.
Indeed, a probate lawyer can be of great assistance during the probate process, but probate lawyers also know how to get around the process. There are probate avoidance strategies that can be implemented, and the most widely utilized probate avoidance tool is the revocable living trust.
When assets have been conveyed into a revocable living trust, the trustee that is named in the trust document can distribute these resources to the beneficiaries free of the probate process after your passing. This can simplify things considerably, and the trust administration process can be handled by a corporate trustee if you do not want to use someone that you know.
A professional trustee would be a certified financial professional, so the assets in the trust could be intelligently invested, and the beneficiaries would not be able to make decisions that are not wise. You could leave instructions that the trustee would be required to follow with regard to the exact way that you want assets to be distributed to the beneficiaries.
Attend a Free Seminar
If this blog post has piqued your interest, you may want to dig deeper. We are very proactive about education, and we go out into the community offering free seminars on an ongoing basis.
The seminars are informative, but they are relatively intimate, so you will not get lost in the crowd. We understand the fact that it is important to feel comfortable with the person that you are discussing your estate plan with. You will get a feel for us as human beings as we provide you with a great deal of very useful knowledge.
These seminars are offered at various different locations around Los Angeles, and we cover different time frames, so you should be able to find a session that works for you. To obtain more details and reservation information, visit https://collinslawgroup.comseminars
Latest posts by Caprice Collins (see all)
- How to Use a Living Trust to Gift to Grandchildren - January 28, 2019
- Should I Purchase Long-Term Care Insurance? - January 24, 2019
- Turning the Page on 2018 and Looking Forward to 2019 - January 3, 2019