I am helping a client settle her husband’s estate. Her late husband was an attorney, and my client thought he had set up his personal accounts to smoothly transition to her after his death.
He almost did. After a flurry of phone calls, forms and medallion signature guarantees, most of his assets easily transitioned to my client. There was one investment account, however, that did not. It was titled in his individual name: it was not a joint account, not titled in his trust, and did not have a named beneficiary.
This asset now has to go through probate.
Probate is the legal process that distributes a deceased person’s property and money. The Probate Court inventories all the assets and property, pays any debts and taxes, and distributes the remainder according to the deceased’s will, or, if there is no will, according to state law.
My client’s husband intended to avoid probate:
- Probate is slow. Some estates take a year or more to be probated. What if he had dependents who needed access to money sooner?
- Probate can be expensive. Court, attorney and other fees add up.
- Probate is public. Anyone can look at the court records to learn how much money he had, what his debts and assets were, and who inherited what.
One way to avoid probate is to set up and fund a revocable trust, also called a living trust. Very simply, after you create a revocable trust, you retitle your assets and property so they are owned by the trust. As trustee, during your lifetime you manage your assets and property. When you die, a successor trustee, named by you, takes over. Assets can efficiently and privately pass to the beneficiaries named in the trust. Your successor trustee can manage the assets in the trust for the benefit of the beneficiaries. You avoid probate; your assets have already been distributed to the trust.
My client’s husband had a revocable trust. Had he titled this one investment account in his trust, my client would not have to go through probate. It has been over a year since he died, and my client wants to be done settling his estate. Her attorney estimates it will be a least another six months.
Revocable trusts are just one tool used to avoid probate. If you are not interested in having everything of value that you own go through probate, I recommend you meet with an estate planning attorney to review your situation and develop an estate plan.
If you already have a trust, review the titling and beneficiaries of all of your accounts. If something that should be titled in your trust is not, you might want to get it done now – before it is too late.
What has been your experience settling an estate?
This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice. Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.
