In short, estate planning is the transfer of your estate and wealth in the most cost-effective and efficient way. The Living Trust becomes an integral tool in doing this since no other planning device offers the same level of flexibility, control and management while you’re alive and when you depart. This year, $2.6 Billion Dollars was lost in Probate Courts nationwide. This because people failed to understand what they needed to do in order to avoid having them family members trapped in the system.
Good Estate Planning must be
• Cost effective &
Nationally 55% of Americans are not planning the inevitable and allowing their families to struggle in the Probate Court system as they lose money and time.
The Probate or court system is where our loved ones end up going to settle our estates if we haven’t planned. Whether we have a Will or don’t have a Will our estate must be probated in the court. If our gross estate (before deductions) is more than $150,000 of assets or more than $50,000 in real estate in some states and other states it is much lower like $20,000 and above then the estate must go through Probate.
Probate comes from the Latin word “probare” or “probatus” to try, probe, and test or to prove something and in this instance someone is trying to prove the validity of your Will or jockeying to get in position as the administrator of your estate so they can distribute your property. The average cost on this is $26,000 and up on a small gross estate of $500,000 and if you own more by virtue of your home the cost can easily swell over $50,0000. When You die intestate without a Will anyone who claims to be a creditor can file in Probate Court to become the administrator over your estate (even over family) and the court could appoint them up if they validate their debt until their debt is fully satisfied which puts a stranglehold on the assets that are supposed to be distributed to loved ones or a charity.
There really are two Probates.
The first encounter with Probate occurs while you’re alive and we refer to it as the “Living Probate.” This is when life throws you a curve ball like a stroke (800,000 people suffer one annually and 35% are 45 and under), heart attack, dementia or Alzheimer’s. You now have to enter the court for a procedure called conservatorship so people can sign off for you in legal capacity. The court procedure has an average cost of $20,000 with many exceeding that due to the need for the court to visually see the person (they will wheel you out to court in this condition), make sure the person seeking appointment is trustworthy (many are not and leads to elder abuse). There is a simple document that is a part of a simple estate plan that avoids this scenario completely and is easy to put in place while you select the person to act as your Agent today while you’re healthy and clear.
The second encounter with Probate is when you pass away either with a Will or without a Will; does not matter both end up in Probate court. This can be expensive, time consuming and open to the public with marketers using the Freedom of Information Act (FOIA) to access court documents so they can market services. The court will not allow full distribution of the estate for at least a year in many states so that creditors can have an opportunity to file in court. You have to sound the dinner bell in a publication which reads: “come and get it.”
Then a credit could file in the Probate Court to become the Administrator of the estate (if no Will) or possible petition to become the Executor (where there is a Will) so that they can use leverage to satisfy their debt.
Imagine this third party coming in to court and petitioning the court to become the controller over the estate of your deceased loved one; happens every day. You can eliminate both of these hassles for your loved ones by having a Living Trust and a Durable Power of Attorney to cover any situation that might take place. It is also highly recommended that you put together an Advanced Health Care Directive (referred to as a Living Will in some states) which describes what you want if faced with a vegetative state or comma and doctors have not given much hope of recovery back to a meaningful way of life. If we don’t let others know what we want they will fumble to figure it out while we are incapacitated and we may linger unnecessarily as family members fight in court and medical bills climb draining the life out of your estate that belongs to our family; after all our lifetime work in accumulating it.
How a Will Protects Your Estate and Inheritance Property
A Will is a crucial element of estate planning. It allows individuals to have a final say in how they want their estate settled; who will receive personal property and valuable assets; appoint an estate administrator; and designate guardianship for minor children. Having a Will in place can assist in the prevention of family disputes. In addition to naming heirs and beneficiaries, this document can also be used to disinherit direct lineage heirs. Legal Wills can expedite the probate process, which is required in all 50 states unless inheritance property is protected through a trust. While it’s best to have a last will and testament executed by a probate lawyer, individuals with small estates can use alternative options. Preformatted Wills can be downloaded via the Internet or purchased in office supply stores. Individuals fill in the blanks, obtain signatures from two non-family witnesses, and have the document notarized. Individuals with estates valued over $25,000 should retain the services of an attorney or estate planner. The cost of drafting a last will is minimal and can be priceless to loved ones who must endure the probate process.
Probate is used to validate Wills and ensure decedents’ final wishes are granted. Upon death, the Will is recorded through probate court and becomes a matter of public record. The designated estate administrator is responsible for settling the estate according to state probate laws. Inheritance property cannot be distributed until approved by a judge. Probate generally takes 6 to 9 months. Much depends on the assets involved, as well as family dynamics. When heirs are in agreement, the process can be completed more quickly than when heirs fight over who should receive inheritance property.
Drafting a last will is relatively simple, but does require some time. Retaining the services of an estate planning lawyer can expedite the process. The first step involves taking inventory of everything you own and declaring who receives the items upon your death. Individuals who have purchased burial plots and life insurance policies should state where documents are located within their last will and testament. Information regarding financial portfolios, real estate, bank accounts, and titled property can also be included within the Will. It is best to retain an original copy of the Will in a secure place. Most people use a bank safe deposit box or fireproof lockbox. It is a good idea to provide a key and copy of the Will to the designated estate executor or provide them with contact information for the estate planner who drafted the document.
Many people procrastinate about executing a last will. When individuals die without leaving directives, the probate court decides who receives inheritance property and who manages the estate. Known as intestate probate, this process usually requires more time and attention and adds additional stress to loved ones during a difficult time. This can be prevented by investing a few hours of time to inventory property and record who will receive it. Certain types of inheritance property can avoid probate by designating beneficiaries. Bank accounts, retirement accounts, financial portfolios, real estate, and titled property can be exempted from probate by establishing transfer-on-death, payable-on-death, and joint tenancy beneficiaries. These forms can be obtained by the financial institution holding the property or including beneficiary names on the recorded title.
Many banks and credit unions offer estate planning services to their customers for a nominal fee. Most probate lawyers and estate planners offer complimentary consultations to help individuals determine which inheritance protection strategies are best suited for their personal needs. Unfortunately, we never know when our day to depart will arrive. By planning ahead, you can rest at night knowing loved ones are protected and your final wishes will be followed.
Probate Executor – Choosing the Proper Person to Administer Your Estate
Appointing a probate executor to administer your estate when you die is a very important decision. Your chosen estate administrator will be responsible for distributing assets and personal belongings according to directives outlined in your Last Will and Testament or Living Trust. Should you die intestate (without a Will), the probate court will appoint a probate executor to oversee and administer your estate. If you want to make certain your final wishes are carried out the way you intend, it is imperative to execute a Will or Living Trust. Otherwise, you will be leaving matters in the hands of someone you may not trust or a complete stranger. Once your estate planning documents are notarized and executed, the probate executor is required by law to adhere to directives outlined in the Will. However, if the Will is contested by an heir apparent, a judge will make decisions based on probate laws. Oftentimes, the probate executor is a direct lineage relative such as a mother, father, daughter, son, sister or brother. However, anyone can be appointed to administer an estate. In some cases, it is better to appoint someone outside of the family. This is particularly true if family dysfunction exists or relatives live out of state.
In many cases, the estate executor is responsible for funeral arrangements. People who pre-arrange their funeral eliminate a tremendous burden from the executor and family. Pre-arranged funeral services can include the purchase of a burial plot, casket, cremation urn and headstone. Some people purchase their burial clothes in advance; especially if they have been diagnosed with a terminal illness. Many funeral homes offer pre-arranged funeral services which can be paid for over a period of time.
Life insurance policies can be used to cover the costs of funeral expenses. The average cost of a funeral is approximately $8,000 to $12,000. If services are not prearranged and no life insurance exists, it can create a heavy financial burden for the family. When selecting your probate executor, it is a good idea to choose someone who is level-headed, organized and trustworthy. In most instances, a probate attorney is retained to assist with administering the estate. However, the executor generally handles many administrative duties including maintaining real estate and financial holdings, closing bank accounts, settling financial accounts, paying outstanding bills and filing a final tax return. Additionally, they are responsible for inventorying assets and distributing assets. It is a good idea to request permission from the person you wish to designate as your probate executor. It is also a good idea to appoint a second probate executor in case the primary administrator is unwilling or unable to perform their duties.
Estate Law Planning to Prevent Litigation In Ivins, Utah
What can be done to minimize this type of litigation in your estate law planning?
• Take the estate out of the courts to begin with. If you have a Will, your estate will go to court. A Will is a road map to the probate court, it does not avoid probate.
• Use a Revocable Living Trust for your main estate planning document. Revocable Trusts keep your proceedings, papers and terms private. There is no forum for complaining unless someone takes affirmative action to create the forum in court. This costs money and can be hard to do. Often the post death trust administration can be completed before those who may complain know what is going on.
Free Initial Consultation with Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506