Ideally, when someone passes away, the family and other loved ones would always have time to grieve and remember the deceased in peace, without having to focus on paperwork, taxes, and legal issues. This is why thoughtful and thorough estate planning is so important.
A significant consideration in estate planning is ease: how money, property, and legacies can be transferred to the next generation in a harmonious, stress-free, and fair process. This is why many people want to avoid burdening their loved ones with the complications and costs involved with probate.
There are many tools that an experienced estate attorney can use to keep your money and property out of probate. These may include joint ownership of bank accounts and real estate titles and designating beneficiaries for life insurance policies and other financial accounts. However, setting up a revocable living trust is often the best, most comprehensive option for avoiding probate.
What is a trust?
Often talked about as an alternative to a will, a trust is a legal structure that owns your accounts and property or is named as the beneficiary of certain accounts and property (like a retirement account). It is managed by a trusted decision maker, known as a trustee, on your and your beneficiaries’ behalf. A living trust is established while you are still alive. You can be the trustee for your own living trust until you are no longer able to manage your financial affairs or you pass away, at which point your chosen backup trustee, also known as a successor trustee, steps up and assumes the responsibility for managing the trust on your or your beneficiaries’ behalf.
How does a trust help you avoid probate?
The purpose of probate is to transfer property ownership for all accounts and property that are owned in your sole name and that do not have a beneficiary, pay-on-death, or transfer-on-death designation when you pass away. A trust can bypass this process completely because your accounts and property are either transferred to the trust while you are alive, or the trust is named as the beneficiary at your death. Therefore, when you die, there is nothing that needs to be transferred by the probate court, as everything is already in your trust or was transferred to the trust automatically at your death. In addition, a trust can cover virtually any type of account or property, from real estate to heirlooms to stock to bank accounts. When a trust is structured correctly with the help of an experienced estate planning attorney, your affairs can stay out of probate court entirely. This process not only limits court costs but also maintains the privacy of your financial records while enabling your beneficiaries to enjoy the benefits of the trust without any disruptions or delays.
Establishing a trust is slightly more complicated and can cost a bit more, initially, than preparing a will. However, if you are willing to invest a little more upfront, a trust can be your best option for avoiding the cost and headaches of probate, later.
Working with an experienced, compassionate estate attorney minimizes the likelihood of a drawn-out, contentious, expensive process for your loved ones after your death. Contact us to set up a consultation to discuss the right strategy to give you and your loved ones the peace of mind you deserve.
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Disclaimer: Materials prepared by JM LAW, PLLC are for general informational purposes only. Educational material does not create an attorney-client relationship and is not an offer to represent you. You should not act or refrain from acting based on information provided.