HandelontheLaw.com Staff Writer
Probate is the legal procedure in which the validity of a Will is proved, the decedent’s property is itemized and appraised, appropriate debts are paid and the residual property is distributed. Due to probate’s costs, lack of privacy, possible challenges to the Will/process, and potential complexity, some individuals choose to avoid probate.
Probate can be avoided by a combination of maneuvers while you’re still alive and kicking. A living trust can preserve the assets with which it is funded while you are well, if/when you are incapacitated and after your death. Joint Ownership with Rights of Survivorship (sometimes Tenancy by the Entirety for married couples) can protect such assets as bank accounts, brokerage accounts and real estate. Here, both owners have full access to the assets and, upon the death of one owner, full ownership of the assets automatically pass to the co-owner. Designating beneficiaries to receive specific assets upon your death is a third option, which can be used for such assets as bank accounts, investment accounts and real estate.
While avoiding probate is desirable for many individuals, each maneuver has its own possible drawbacks. A Living Trust costs money: to set up; property it is going to control must be transferred into it; and carrying out its wishes can cost money. Joint ownership with rights of survivorship could mean that the co-owner withdraws all the money, or that there are gift taxes or that your co-owner’s creditors can seize your funds, for several other examples. Clearly, avoiding probate should involve the services of a lawyer specializing in Wills/Trusts/Probate/Estate Planning.
DO’S AND DON’TS
DO use a living trust for assets while you are well, incapacitated and after death.
DO use joint ownership with rights of survivorship for bank/brokerage accounts and real estate.
DO designate beneficiaries to receive specific assets upon your death.
DO consult/retain a lawyer specializing in Wills/Trusts/Probate/Estate Planning.
By Kathy Catanzarite
Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither the author, handelonthelaw.com, or any of its affiliates shall have any liability stemming from this article.
WILLS/TRUSTS/PROBATE DOS AND DON'TS