Why Most People Want To Avoid Probate

When you pass away or can’t make decisions anymore, many of your things, like your house or money, might have to go through something called probate. Probate is like a court process where a judge helps figure out who gets what. But probate can take a long time, cost a lot, and everyone can see what’s going on, which is why most people want to avoid probate.

Last week, we talked about how probate works. Now, let’s look at why it can be a hassle for your family and how to help them avoid it.

WHY PROBATE CAN BE A PROBLEM FOR YOUR FAMILY

Probate can take months or even years to finish. After you die, your family will already be sad. Probate can add a lot of stress. While your things are tied up in probate, your family might not have the money they need. This could potentially make things even harder. Plus, they’ll probably have to hire a lawyer, which costs money. And , they might also need to pay court fees and other costs.

Probate is also public. So, anyone can find out who’s getting what. That could put your loved ones at risk of being targeted by scammers. If you’ve left more to one person than others, or left someone out entirely, it could cause fights among your family members. This can lead to even more court battles, which makes everything more expensive and stressful.

HOW TO KEEP YOUR FAMILY OUT OF PROBATE

Luckily, not everything you own has to go through probate. Some things, like 401(k)s, IRAs, or life insurance, already have a person (called a beneficiary) named to get them. These things will go straight to that person without needing probate.

Here’s a list of some things that can skip probate:

• Retirement accounts (IRAs, 401(k)s, pensions)

• Life insurance or annuities

• Bank accounts that say “Payable-on-death” (POD)

• Property, like cars or houses, that say “Transfer-on-death” (TOD)

• Property you own with someone else, like a house, where the survivor gets it automatically

However, if you name your “estate” as the person who gets these things, or if something happens where no one is left to get them, then they will have to go through probate.

It’s also important to know that naming a beneficiary for these assets doesn’t give you control over what happens to them later. If you want more control over how your stuff is shared, especially in a family with step-kids or no kids at all, you’ll need to plan a bit more.

AVOIDING PROBATE WITH A LIVING TRUST

One way to avoid probate is by setting up a revocable living trust. A trust is like an agreement where someone (the “trustee”) manages things for someone else (the “beneficiary”). With a living trust, you’re in charge of your own stuff while you’re alive, but you name someone else to take over when you pass away or can’t manage anymore.

When you set up a trust, your stuff doesn’t go through probate. Instead, the person you picked (the “successor trustee”) handles your things right away. This saves time, money, and stress for your family.

BENEFITS OF A LIVING TRUST

A trust gives you more control than a will because you can set rules for when and how your things get passed on. For example, you can make it so your kids only get their inheritance after they finish college or reach a certain age. A trust also keeps your things private and protects them from your kids’ creditors or lawsuits.

FUNDING YOUR TRUST

To make sure your trust works, you have to actually put your stuff into it, like changing the title of your house or bank accounts to the trust’s name. If you don’t do this, your trust won’t work, and your family could end up in probate anyway.

We can help you with this process to make sure everything is set up correctly, now and in the future.

LIVING TRUSTS AND PROTECTION

A revocable living trust won’t protect your stuff from taxes or creditors while you’re alive. But it can protect your loved ones after you’re gone. If you want protection from lawsuits or creditors while you’re alive, we can help you look at other options.

MAKING THE RIGHT PLAN FOR YOUR FAMILY

A living trust can be a great way to avoid probate, but every family is different. We’ll work with you to make sure you get the right plan for your family, based on what you own and what you want to happen after you’re gone.

Let’s sit down together and make a plan that gives you peace of mind, knowing your family will be taken care of when the time comes. Contact us today to get started!