Although having a will is a good basic form of planning, a will does not avoid probate.
Probate is the legal process through which a deceased person’s estate (personal property, real estate, or other assets) is properly distributed to heirs and beneficiaries. However, many people try to avoid probate if at all possible. Here are 5 key reasons why you may wish to avoid probate:
- Probate is a matter of public record, which means personal family and financial information become public knowledge.
- There may be considerable costs, including court, attorney, and executor fees, all of which get deducted from the value of the estate.
- Probate can be time-consuming, holding up distribution of the assets for months, and sometimes, years.
- The probate process can be complicated and stressful for your executor and your beneficiaries.
- Probate can be so demanding that it can cause families to quarrel and split apart during an emotional and time of heart ache
Fortunately, there are many ways to avoid probate. They include:
- Trusts: Properly designed and funded trusts are typically highly effective at bypassing probate. A trust can accommodate virtually any asset, including real estate, vehicles, investments, antiques, cashing holdings, and proceeds from life insurance and retirement accounts.
- Transfers at Death:
- Transfer on Death (TOD)- this tool transfers the asset in-kind and can work well for real estate or investment accounts
- Payable on Death (POD)- this tool can work for bank accounts
- Beneficiary Forms- this tool is commonly seen on life insurance policies and certain annuities
- Lifetime Transfers:
- Joint Tenancy or ownership- works on real estate, bank accounts, and investment accounts
- Outright gifts
Bottom line: Probate is a less than ideal outcome, but it is also highly preventable. The good news is that with proper trust-centered estate planning, you can avoid probate for your estate, simplify the transfer of your financial legacy, and provide lifelong asset and tax protection to your family.
To learn more, call us for an appointment at (614) 429-1053. One of our experienced attorneys at the law office of Charles H. McClenaghan will be happy to strategize with you.