Should I Avoid Probate?

You've probably heard all about the living trust and how it can be used to "avoid probate" when you pass away. Probate is the court-supervised process of validating a will, appointing an executor to handle an estate, paying off the decedent's debts and distributing what's left to the beneficiaries.

Believe it or not, probate is rarely the calamity that critics claim. Probate may take time, but it ensures that debts are paid, property is transferred and beneficiaries receive their share.

Many Types of Property Pass Outside of Probate

Many types of property pass outside of probate, all without the requirement of establishing a trust. Such property includes:

• Life insurance policies
• Bank accounts
• Retirement accounts
• Investment accounts
• Real estate held jointly with rights of survivorship

The probate laws vary from state-to-state: Some states have statutorily mandated court fees, while other states have minimal fees. Many states offer simplified procedures that are simple and cost-effective for smaller estates.

Often, a well-drafted will can eliminate some of the steps required during probate proceedings. Additionally, much of the delay customarily associated with the probate process is the result of tax filing requirements and tax laws, which cannot be avoided with a living trust.

While a living trust can be very beneficial, in many cases it doesn't totally avoid probate, and a simple "pour over" will is necessary to address any property that was not transferred to the trust during the decedent's lifetime.

Living trusts can have a great value when it comes to estate planning; a properly drafted trust can be an effective tool for managing one's assets in the event of a disability or dementia.

In light of our growing elderly population, a living trust is an excellent tool for minimizing the risk of elder financial abuse, so it should be an important consideration during the estate planning process.

For more probate advice, reach out to a probate lawyer near you!