What is Probate? How Does Probate Affect My Heirs?
According to the American Bar Association (ABA), “Probate is the formal legal process that gives recognition to a will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries.” Most of us have either experienced or heard about long, expensive, painful Probate proceedings. Many of us wonder if avoiding Probate will protect our legacy and ease the burden on our beneficiaries when we pass. As with most things involving the law, there’s no one answer.
What about Trusts?
Since probate processes vary state by state, and the size and complexity of estates varies, avoiding probate doesn’t always avoid expenses or complications. Some states have expedited processes to help small, simple estates speed through the system and others do not. And whether an estate goes through probate or avoids probate through a living trust, there are costs, such as taxes, involved.
In the end, avoiding probate doesn’t automatically make things less expensive or easier for your heirs as long as you have a valid will and a small estate. However, for those with larger or more complex estates or who live in states with statutorily mandated court or attorney fees, avoiding probate may have a significant impact on the money and time spent before inheritance is distributed to beneficiaries.
A Revocable Living Trust is the most commonly used and advertised tool for avoiding probate. The most common error made with living trust is to create them and not fund them. Having a “pour over” will, says the ABA, transfers to the trust any assets left out during your lifetime. Furthermore, having a living trust can be invaluable for managing your assets in case of illness, disability or dementia while protecting you from elder financial abuse.
Having a funded revocable living trust has value for almost any estate plan, regardless of probate issues. LegacyLock not only provides state approved trust forms but also a trust funding kit and a host of other state approved documents critical to most estate plans.
Next Steps:
Read more about the importance of organized estate planning here: How to Plan a Loving Legacy.
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