Probate: A Difficult time to Deal with Heirs and the Estate
Probate is the legal process used to transfer property, real estate, personal belongings and bank account holdings. Depending on the size of the decedent's estate and family dynamics, probate can tie assets up in the court system for six months to three years. If family disputes arise, legal fees can end up costing more than the estate is worth.
Part of the problem with probate is that it involves government agencies and attorneys. When someone dies it is almost guaranteed that many people will want to stick their fingers in the inheritance pie.
The solution to avoid probate is to file a Revocable Living Trust. This is the only ironclad way to avoid the probate process. A trust will also keep your private information private. When a Last Will and Testament is executed, it becomes public information when the individual dies. Anyone who wants to read your Will can do so by making a visit to the local courthouse. When it is part of a trust, it does not pass through Probate Court and is thereby kept confidential.
An Estate Executor or Administrator is appointed in the Will. Careful consideration should be taken when naming the Executor. The person should be capable of performing necessary tasks to administer and close the estate. It's important to name a second person to act as the Executor in the event the primary named individual is unable to administer the estate.
Last, but not least, it is better to name an Executor who resides in the same state as you whenever possible. When the named Executor resides out of state it can result in additional legal fees and delay proper administration of the estate. In some instances, the Administrator can perform necessary duties without a lawyer if the estate is small.
There are ways to avoid probate without setting up a revocable living trust. However, it is best to consult with a professional estate planner or elder law attorney to ensure you comply with the laws of your state.
My article, "How to Avoid Probate" offers suggestions for protecting assets through assigning Payable-on-Death (POD) and Transfer-on-Death (TOD) beneficiaries. These options are not available in all 50 states. Certain requirements apply to these types of accounts and generally require filing forms with the Assessor's office in the county where the decedent resided.
Estate planning is essential to avoid probate. Whether you realize it or not, when you die your loved ones will be in a state of shock. Grief will consume them and they will not be thinking rationally. Their only concern is to make certain you are given a proper funeral service and burial.
Afterwards, they will be left to clear up any unfinished business you may have. They will have to sell your home, sort through your personal belongings, figure out your finances, consult with lawyers, appear in front of a judge and hopefully avoid family disputes. By taking time now to draft a Revocable Living Trust and execute a Will, you can save your family a tremendous amount of stress and emotional pain.
Published on July 30, 2008 at 09:49 PM | Comments: 1