WHAT HAPPENS IN PROBATE? Here’s what happens in probate. First, a court reviews the deceased person’s Will to decide whether it’s valid and enforceable. A court may authenticate and accept the Will, allowing the appointed executor to begin closing the estate. A court can also appoint an administrator to oversee the settlement. The court determines how to distribute the estate and then the executor follows through. The probate process can take many months and even years to close. In addition, there are statutory fees that come into play, causing contested probates to get expensive. Taxes owed, types of assets and arguments can all impact how long a probate can take. HOW CAN I AVOID PROBATE FOR MY HEIRS? Avoid probate by: • Jointly owning assets. Your half of the ownership automatically transfers to the other person if you pass away. • Moving assets into a Revocable Living Trust. Assets within a Living Trust avoid the probate process. Keep in mind that just having a Will does not prevent the probate process. A Living Trust allows you to control who, what and how your settlement is carried out rather than have it controlled by the courts. Think of your Living Trust this way: You are the director of your own play. On the stage are your friends, family and assets. As the director, you get to decide how your play “plays out.” Absent a Living Trust, the courts direct your life. Ugh!
PROPERTY PLANNING CAN ENSURE A SMOOTH TRANSITION OF PROPERTY TO THE NEXT GENERATION.
WHAT GOES INTO A LIVING TRUST? You can put most assets into a Living Trust, including:
Real estate, such as a home or rental property Financial accounts, including savings or checking accounts Business ownership, whether it be complete or partial ownership of a business Investments, such as stocks or mutual funds Personal property, such as vehicles
The Will and Trust go hand in hand. A “pour over” Will is there to catch anything you neglected to add to your Trust. Perhaps you bought a new property along the way and did not “fund” it into your trust. This property then ends up in probate. The courts look to your Will and it says that anything not in the Trust should be considered as part of the Trust. Hence the term pour over. Property owners in particular should take advantage of proper planning. We have seen too many families across the country lose property to taxes, poor planning, and family fights. Proper planning can ensure a smooth transition of property to the next generation and this can happen during your lifetime, too.
Bradley Barth is a partner and Supervising Attorney of the firm’s Transactional and Estate Planning Department encompassing business formations and transactional matters, estate planning, domestic and offshore asset protection, probate, trust administration, tax and real estate law. He views his role as a trusted and long-term advocate of asset protection planning in helping his clients achieve and protect their financial goals and lifetime accomplishments. BRADLEY BARTH, ESQ. Partner BarthCalderon, LLP (714) 704-4828 ext. 114 For a complimentary planning assessment contact paul@barthattorneys.com
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