Did you know, according to a recent survey, less than one-third of Americans have any form of estate planning today? Or that, for those who have taken the step to plan forward, a last will and testament is all they have?
While a will can be a critical part of your planning, as it can give you some say in how your estate is distributed upon your death, it is often not enough to reach your goals for your legacy or protect you during your life. Further, contrary to popular belief, it does not allow you to avoid probate.
Many of our clients may have heard the term “probate” but they do not know what it means. Put in its simplest terms, probate is a legal process carried out through the court system to facilitate the transfer of assets after someone dies. Probate takes place at the time of the person’s passing whether he or she had a last will and testament or not. When you pass away without a will, however, it is said that you died “intestate” or without a will.
The probate court is designed to ensure that the legitimate creditors of the recently deceased person are informed and that any assets, titled solely in the name of the deceased, are transferred to the beneficiary who stands to inherit them. When you have a last will and testament in place, you take steps to select your heirs. When you do not, they will be identified during the probate process under our state’s intestacy laws. This can be risky as our state’s laws may not reflect the person or persons you wish to inherit from you. Further, the probate process is public and can open your estate plan up to challenges from others.
Probate is not always necessary. Whether it is warranted depends on several factors. Generally, any property owned solely by the person who died is subject to probate. This typically includes any remaining money in an individual bank account; homes, land or any other real estate; and business holdings.
How do you avoid probate? First, know that a last will and testament is not the answer. The key is to create a vehicle for transferring your assets that can outlive you. A trust agreement of any kind, is an example of an estate planning tool that can help you avoid the probate process. This is because you re-title your assets, also known as “funding” your trust, to ensure that at the time of your passing the trustee can distribute them to your chosen beneficiaries in the manner you determine is best.
We know this blog may raise more questions than it answers. As estate planning lawyers we can help you craft a strategy that protects your interests and provides for your loved ones now, and in the future. Do not wait to contact our law firm to arrange a meeting whenever you are ready.