Planning ahead to avoid the Horrors of Probate is protecting what matters most to you and providing a plan for your family in the event of your demise. No one wants to discuss their own death, but by planning ahead, you are ensuring that your family will be well cared for even after you are gone.
Probate occurs when…
Probate will be required when the Decedent leaves assets over $100,000 to be collected that does not name a beneficiary, a joint tenant or co-owner. Probate begins any time following death and will last for a minimum of six months. Probate can extend for many years based on the parties and the issues involved.
There are a few ways to avoid probate by eliminating assets in your own name and by creating a revocable trust, but be sure to fund it!
A trust is an agreement that you have with yourself that sets out the instructions for how your money will be managed both during your lifetime and after your passing. In many cases, individuals will benefit from having a trust, but not everyone needs to have one.
Generally there are three individuals involved in a particular trust, some of whom may handle multiple roles:
The Grantor is the individual who creates the trust. The role of the Grantor does not change at any time after the trust is created. Therefore, if you create the trust, then you are always called the Grantor of the trust.
The Trustee is the individual who agrees to manage the assets of the trust according to the instructions in the trust document. The role of the Trustee may change at various times during the existence of a trust. Typically, if you are creating the trust, you will also act as the Trustee of the trust, at least initially. Spouses, or other individuals, can act as Co-Trustees if desired to mimic joint tenancy ownership.
The Beneficiary of the trust will receive the benefit of the trust assets (income, or principal, or both) while the trust exists and while it owns some assets. If you have created a trust for your own benefit, you will be the Grantor as well as the Beneficiary, although the Beneficiary role will likely change at some point while the trust exists.
Estate Planning Goals:
When planning your estate many of us have a version of the following in mind:
• Ensure that your money is available to each spouse during each of your lifetimes
• Ensure that the surviving spouse is taken care of financially after the first spouse dies
• Ensure that the children are provided for after both parents pass away
• Ensure that estate taxes are minimized
• Maximize creditor protection
While you read this you may think you don’t have an “estate” but if you have any combination of bank accounts, investments, real estate, business interests, life insurance policies, personal property, jewelry and collections of any sort, you will want to protect these things that really do matter. Call today to RSVP for any of our FREE workshops, you will get the information needed to be, at best, prepared to make decisions while you can.