Part one of two
If you’re a senior you’ve probably have had the time to think about leaving things to your loved ones, so you’ve prepared a Will. A Will allows you to make your wishes clear, to designate beneficiaries, and to spell out who will get what. A good step – but did you know that having a Will means that your estate will be settled in court? This is called probate.
Probate was established to provide a standard, legal mechanism for everyone who has a Will: the court verifies your Will, reviews your inventory of assets and transfers titles of assets to your heirs.
Probate may also call for appraisals of things such as land, real estate or valuable belongings. Probate takes time; usually about a year. It can be costly since you will likely need a lawyer and you may pay court costs. Probate also allows others, including creditors, to challenge your Will. Probate also places the settlement of your estate into public view.
The vast majority of probate cases – as high as 90% – involve the estates of people 60 and older. What many seniors don’t know is that probate is not necessary.
With a properly created, legally-binding Estate Plan – which can actually result in significant tax savings as well as asset protection – your heirs will not only avoid going to court but it’s possible that the net value of your estate, after all costs, will be higher than if the estate went through probate.
How can this be?
It’s simple in principle: our legal process allows any individual to create legal documents such as a Living Trust that keep their estate out of probate – and these options are not just for higher-value estates or for wealthy people. While there’s a fee to set up a Living Trust (it should be created by an attorney trained in Estate Planning and Trusts) it can more than pay for itself in the end.
A Living Trust assures privacy in the settlement of your estate. It’s also a very flexible tool where you can get very creative, crafting it in any number of ways. For example, you can leave certain grandchildren certain things or leave them funds for college. And, because a Living Trust is a legal document, you’ll be assured that your wishes are carried out exactly as you specify.
In part two we’ll talk more about avoiding probate and the benefits of a Living Trust.