Probate Administration: Avoid the Hassles

probate administrationTo understand estate planning and why you may want to take certain courses of action, you must know something about probate. In this blog post we will give you some background about probate and subsequently look at the subject of probate avoidance.

What Is Probate?

Probate is a legal process that takes place under the supervision of the probate court. When you pass away using a last will to direct the transfer of your personally owned property, this property is considered to be probate property. It is not legally transferred to the heirs until the estate has been probated.

During probate anyone who wanted to contest the estate could present his or her argument before the court. Whether there is a challenge or not, the court is charged with the responsibility of determining the validity of the will that has been admitted.

Final debts, including taxes, must be paid during the probate process.

If the will is deemed valid and things can go forward, the executor or personal representative will inventory the remaining assets and prepare them for distribution to the heirs.

Why Would You Want to Avoid It?

There are three primary reasons why people often decide that they would like to avoid probate. One of them is the fact the probate is a public proceeding.

Anyone who is interested could access the probate records. He or she would know everything that went on during probate. This would include the press, and this is a factor for certain individuals.

Many people would prefer that their final affairs be conducted privately.

In addition to the above, there are significant costs that can accumulate during the probate process. The court charges a filing fee, and the executor is entitled to payment for his or her time and effort.

A probate attorney and an accountant will often be necessary. In many cases, there are appraisal and liquidation expenses. As you might imagine, all of this can add up to consume a relatively significant portion of the estate.

Finally, probate is time-consuming. Complicated cases can take years; simpler, routine cases are going to take months. People who are in line for inheritances will not receive bequests until the estate has been probated and closed.

Can It Be Avoided?

Probate can be avoided. There are a number of different probate avoidance strategies that can be implemented.

The most effective and efficient probate avoidance tool is the revocable living trust.

With a revocable living trust, you do not immediately surrender control of the assets that you are conveying into the vehicle. At first, you as the grantor of the trust may act as both the beneficiary and the trustee.

As such, you can do whatever you want to do with the assets. You can invest them as you see fit, and you can take monetary distributions out of the trust.

Because the trust is revocable you can actually revoke it entirely. You are also free to change the terms of the revocable living trust.

When you create the trust, you name a successor trustee and successor beneficiaries who will assume these roles after you die. After your passing, the trustee will distribute monetary assets to the beneficiaries in accordance with your wishes as stated in the trust agreement.

These asset distributions take place outside of the process of probate. This is just one way to facilitate probate avoidance, but there are a number of others.

When it comes to probate avoidance, you want to take pause before embracing so-called “simple solutions.” For example, you could name a beneficiary to a transfer on death account that you open at a bank or brokerage.

When you die, the beneficiary assumes ownership of the assets in the account outside of probate.

This can sound great on the surface, but various different negative circumstances can arise.

The same can be said of joint tenancy. It is possible to name someone as a co-owner of your property. This person would be a joint tenant.

While the joint tenant would inherit the entirety of the property after you die outside of probate, multiple different unintended consequences can result if you go this route.

Join Us for a Free Seminar

We regularly offer estate planning seminars at various different locations throughout southwest Florida. If you browse through our schedule, you should be able to find a session that works for you.

The seminars are free to attend, but we do ask that you register in advance. You can click the following link to obtain details and registration information: Fort Myers, FL Estate Planning Seminars.

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We specialize in estate planning, incapacity planning, business planning, trust administration, and probate.

Take your first step by contacting us or attending a free estate planning event today.

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