After a loved one passes away, sorting through their estate can be both overwhelming and confusing. In addition to the emotional toll of grieving a loss, the potential for a long probate battle can add to the stress and uncertainty to the situation.
Probate is a legal process whereby a court appointed official inventories the assets of your deceased loved one and determines the appropriate beneficiaries once all outstanding debts are resolved. One myth that many believe is that when there is a will, you can avoid probate. This assumption is false. In fact, the very word probate comes from the Latin word “prove,” meaning you must prove that the will is valid before any assets can be distributed. Steering clear of probate not only spares loved ones emotional stress, it also has several other benefits.
- Cost – Probate is not without cost. It can add up to thousands in legal expenses for family members. The more complex the estate, the higher these fees can become.
- Privacy concerns – Once the court becomes involved in your family’s estate, everything is a matter of public record, including your will and information regarding your assets.
- Time consuming – Going through the legal process involved with probate can be fraught with hassles. Additionally, your assets will be tied up in the court system, which could take months or years to resolve. This will ultimately delay the distribution of assets to beneficiaries.
One way to avoid the headache of probate is to create a revocable living trust, making the trustee the owner of your property. This means that upon your death, your assets will be transferred to beneficiaries named in the trust instead of being transferred through the court system.
A joint tenancy or a payable on death clause, is another way to avoid probate. In this scenario, the individual named as your joint tenant will be given all assets upon your death. While this is a good solution if you do not have a large estate, it can be troublesome if you have significant assets because they tenant could be subject to gift, estate or capital gains taxes.
The legal intricacies of probate, revocable living trusts and joint tenancy can be very complicated. To ensure your assets are taken care of per your wishes it is important to discuss the options with a seasoned estate planning attorney, such as the team at McLario, Helm, Bertling & Spiegel.