How You Can Avoid Probate, Save Taxes and More!
Our office provides the following documents that should be included in every properly drafted living trust:
- The Revocable Living Trust
- Pour-Over Wills
- Durable Power of Attorney for Healthcare and Asset Management
- Living Will – Right to Die Will
- Anatomical Gift Declaration
- Directive to Trustees
- Abstract of Living Trust
- Directives to Financial Institutions
- Amendment Letters
- Personal Information Section
- Living Trust Particulars
- Transfer of Assets
- Deed Preparation
Questions and Answers
What Is Probate?
Probate is the legal process through which the court assumes management and control over the assets of an individual after their death. The court supervises the payment of taxes, debts, probate fees and distribution of the estate. Probate can also take control if you become disabled or incompetent.
How Long Does Probate Take?
Generally 9 months to 2 years. During which time, most assets are frozen for an accurate accounting. Nothing can be distributed or sold unless approved by the courts.
Probate is a Public Process!
This process invites creditors and any interested party or heirs to contest your Will and make claims against your estate.
Loss of Control!
Your family has no control. Costs, Time Frames and Publicity are determined by the Courts and Probate Attorneys!
Cost of Probate?
Your estate must pay for probate fees before any assets are distributed to heirs. The estimated costs to probate an estate generally are 10-15% of your gross estate value. If you own property in more than one state, probate will be conducted in each state that you own property.
My estate is too small for Probate?
If you own real estate and the gross value exceeds the minimum statutory value or if the total estate, including personal effects, exceeds the minimum statutory value, your estate will go through probate. If you hold real estate in another state your estate will go through probate in each state. If your estate is valued at less than these amounts you can avoid probate. However, since most people have assets that exceed the minimum limits, few people are spared from probate.
My Estate is not valued at $600,000 I will avoid Probate?
The $600,000 referred to here does not determine if your estate will go through the probate process or not. This is the value of your estate upon death that Federal Estate Taxes will be calculated on. An estate value under $600,000 generally will avoid paying Federal estate Taxes. An estate valued over $10,000 or $60,000 generally will go through the Probate process.
What if I hold my Assets in Joint Tenancy with my Children?
Entering into joint tenancy with your children creates an additional set of problems. The children’s share of property becomes subject to the children’s creditors, including people who win lawsuits and judgments against them. If the child you are in joint tenancy with were unable to pay his or her debts then the parents assets held in joint tenancy with the child would be subject to the child’s creditors. Therefore, the parents could well lose their home to satisfy their child’s creditors or judgment!
I Have a Will. Won’t that do?
Contrary to what most people have heard and been led to believe over the years, a will is probably not the best way to plan your estate. Primarily because a will does not avoid probate. In fact, a will is a one-way ticket to probate, all wills must be verified by the court before they can be enforced. Also, because a will can only go into effect after you die, it provides no protection if you become physically or mentally disabled. This is of real concern to millions of older people because you could easily end up under the control of the probate court before you die. Fortunately, there is a traditional alternative to wills and probate. It is called a Revocable Living Trust. It avoids probate and makes sure your plan will not be altered by the courts or greedy relatives at your death or disability.
What is a Living Trust?
A living trust is a legal entity in which you hold and control your assets. Unlike an individual, a trust does not experience physical death, therefore it is not subject to probate. Property held in a living trust, passes to your heirs avoiding probate, expensive court proceedings, costly delays and public exposure. Your privacy is preserved, and emotional stress on your family is minimized. It reduces and or eliminates estate taxes, is extremely hard to contest and makes a very effective pre-nuptial agreement.
Who needs a Living Trust?
If you own property you will benefit from a living trust, especially if you have children or own any titled property. If you want to insure that your loved ones will be spared from probate when something happens to you, you should consider a living trust.
Do I lose control of my Property?
Absolutely not. You keep full control over your property. As trustee of your trust, you can do everything you could do before – buy and sell property, make changes, even cancel your trust at any time. Nothing changes but the names on the title.
Is it hard to Transfer Property into my Living Trust?
No. A reputable Law Firm will be able to assist you in transferring title on all your assets into the name of your living trust. One of the most important responsibilities the Law Firm has is making sure that ALL necessary articles you own are transferred into your living trust, from beginning to end! Many living trusts are not funded in the effort to save money. If you do not have a properly funded trust your estate will go through probate.