With the rise in popularity of the Living Trust, a lot has been said recently on the topic of probate avoidance. So, what is probate? Does it matter? Should you fear it?
Probate is simply the public process of establishing the validity of a will before the court and settling the person’s estate. Probate is nothing to fear, but there are a few issues to consider when choosing an appropriate estate plan, and putting your estate through probate is among them. By the end of this post you will have a better understanding of the probate process, and the pros and cons of having your estate submitted to probate.
Because wills are such a personal device, many people expect the probate process to be private. However, since wills are filed with the court, probated estates become a matter of public record. That means anyone can access the information. Outside basic privacy concerns, a public administration process opens your beneficiaries up to potential hassles from financial predators, charities, and will challengers.
While most people would prefer the settlement process to be completed ASAP, probate can take between 4 and 24 months (unless litigation is involved.) For some, this lengthy time delay can create financial and emotional stress. A few of the reasons probate takes so long include: 1) Paperwork. Lots of paperwork. 2) Complexity. Estates with numerous or complicated assets simply take longer to probate as there are more items to be accounted for and valued. 3) Probate Court Caseload, 4) Challenges to the Will. Heirs, beneficiaries, and those who thought they would be beneficiaries, can object to and challenge the will’s terms and legality. 5) Creditor Notification. A will’s executor must notify the decedent’s creditors so they have time to submit claims for debts.
The bad news: probated estates are subject to a variety of costs from attorneys, executors, appraisers, accountants, courts, and state law. Depending on the probate's complexity, fees can run into tens of thousands of dollars. (Try our free Probate Calculator) The good news: probate costs are relatively minor in North Carolina for small estates and probate costs can be significantly reduced by avoiding probate altogether. Here are three simple ways to avoid significant probate costs: 1) Name a Beneficiary. A beneficiary is just a fancy name for the person designated to receive a stated benefit. Common assets that designate a beneficiary include: life insurance, annuities, and retirement plans. 2) Create a Revocable Living Trust. A revocable living trust owns your property, you remain in charge of all legal decisions until your death, and assets belonging to the trust are not subject to probate. 3) Own Property Jointly. Probate can be avoided if the property you own is held jointly with a right of survivorship.
So, what should you do? Sadly, there’s no one-size-fits-all approach. But, there are a number of affordable and efficient options that can be customized to fit almost any set of circumstances. Click Here to schedule your Virtual Estate Strategy Session with me. Choose a day and time that works best for you, we'll send you an intake form, I'll contact you either by secure video portal or telephone, I provide a comprehensive overview of your options as well as answers to all your questions, then you choose the plan that works best for you. When it’s time to sign the documents we send the completed plan directly to your home or place of business, we review the plan together for accuracy, and then we make notaries and witnesses available at the location of your choosing to execute the plan. Easy peasy! As an added benefit, members of our Estate Maintenance Program have 24/7 access to their entire executed plan through our secure client portal, accessible through any device. Contact Me to learn more about our Estate Maintenance Program.
Click Here for more estate planning advice, informational videos and articles, as well as a copy of my new Ebook Six Things to Know Before Making a Will or Living Trust (2016 Edition).