Avoid Probate by developing an estate plan 05.10.2022
This post focuses on the benefits of an estate plan to avoid probate and assure your assets are distributed according to your wishes and in a timely fashion.
What do you want for your loved ones when you are gone? A protracted, expensive public legal process (known as probate) or an efficient disposition of the assets in your estate?
Most individuals want control over what happens to their assets when they pass away. And most people want the disposition of assets to be as easy, streamlined and tax efficient as possible for the people we leave behind.
These things can be designed and planned for with two documents: A Last Will and a Living Trust. These are just two pieces of an estate plan.
A Last Will states who will be the executive of your estate, who will be the guardians of your minor children, who will receive your assets, and how and when they will receive them.
But having a will doesn’t help your heirs avoid probate, which is a time consuming, expensive, and public process. Developing an estate plan also involves creating a Living Trust. A Living Trust provides lifetime and after death property management, more flexibility in how your assets will be distributed, avoids probate, and most importantly, provides for immediate asset distribution. The benefits of an estate plan are clear.
However, it’s important to note that it’s not good enough to just have a Living Trust document. You must also fund the trust. This is done by retitling your assets in the name of the trust, and transferring them into the trust. If your assets have not been retitled and transferred into your trust, or you die without funding it, the trust will be of little benefit, as your estate will be subject to probate, and there will be significant estate tax consequences.
If you’re still asking, “What is an estate plan?” Or if the thought of developing an estate plan sounds tedious and overwhelming, you’ll want to reach out to a trusted person for more information, guidance, and support. While most don’t focus on estate planning, financial advisors can help you get your documents in order and often are an excellent resource to help you find an estate attorney.
Looking for an estate planning advisor? Learn how to begin estate planning today.
Download our white paper on Developing an Estate Planning