Top 3 Reasons to Avoid Probate
This is what can happen if your assets go through probate:
Caroline was distraught after her husband, Jim, died. She didn't know which way to turn and was relieved when she received a telephone call from Jim's financial advisor explaining that she had to sign some papers.
The financial advisor explained that Jim had just been about to sign over their assets to his investment firm and he discussed the individual assets and debts or the estate. He was clearly “in the know”.
Caroline signed all the papers.
When Caroline's children asked about what was happening with Jim's estate, she told them about the financial advisor.
The children called the estate planning attorney who tried to contact the financial advisor - the money and the advisor were both gone.
Caroline and her children were devastated. How was she going to pay her bills? The financial advisor had known all about their assets, so didn't Jim speak with him and trust him?
Probate is a public process, meaning that anyone can walk into the courthouse or research online and read a list of your bills, assets, and beneficiaries.
What is Probate?
Probate is the court-supervised process that transfers assets from the deceased's name to the beneficiaries' names.
When Does Probate Take Place?
Probate is required when someone dies owning assets in his or her individual name or payable to the estate.
Can Probate be Avoided?
Absolutely. Probated is avoided if the decedent dies without owning any assets in his or her own name.
How Should I Own My Assets to Avoid Probate?
Often, the best way to own assets and avoid probate is in a fully funded revocable living trust. Though a trust isn't for absolutely everyone, it is a good fit for many people and has tremendous benefits - with few or no drawbacks.
However, jointly owned assets and beneficiary designation assets payable to a designated beneficiary also avoid probate. These 2 probate avoidance tools are appropriate in many situations, but do have drawbacks.
- An example of jointly owned assets would be how a husband and wife typically own their home and bank accounts.
- An example of beneficiary designation assets payable to a designated beneficiary would be life insurance payable to a spouse or retirement account benefits payable to an adult child.
Be sure to consult with a qualified estate planning attorney for advice regarding your individual situation.
How Does Avoiding Probate Keep My Assets and Debts Private?
When your assets don't have to go through probate, your assets and debts don't need to be listed on court forms. Predators, nosey neighbors, and greedy relatives won't be able to see who got what or what you owned and owed - but only if probate is avoided.
The 3 Top Reasons to Avoid Probate
Keeping your financial and family affairs private is one of the top 3 reasons to avoid probate. The other top reasons to avoid probate are:
- You can save lots of MONEY by avoiding probate - probate is very expensive in many states - probate related lawyer, court, and executor fees are painful and can easily be avoided. There are still expenses even if probate is avoided, but they are typically much less.
- You can save lots of TIME by avoiding probate - probate can be very lengthy in many states - probate delays are expensive, frustrating, and keep the family from moving on emotionally and financially. Probate delays can be easily avoided.
How to Find an Estate Planning Attorney
To find a qualified estate planning attorney, use or website, www.attorneys.org, or ask friends, family, or the bar association for a referral.