How to Avoid Probate Through Estate Planning
After losing a loved one, no one wants to have to go through the costly and time-consuming process of probate, the official proving of a will, and transferring the property of the deceased. A probate must be filed immediately after the person’s death and is a public process that takes an average of one to two years to complete. Fortunately, probate can be avoided in most cases through estate planning. Any living person owns estate— which is nearly everyone— can create an estate plan, which is a favorable course of action to probate after death. In reality, not enough people have an estate plan, but an experienced estate attorney can assist you in drafting one. Before doing so, it is helpful to go over some important aspects of the process and understand why everyone should be creating a plan.
I. Probate can be extremely costly
During the typical one to two-year process of probate, all of the assets of the deceased are frozen until the courts make a final decision. On average, probate can cost anywhere from 3% to 8% of the total estate value. Some of the fees that occur throughout probate include personal attorney’s fees, accounting fees, appraisal fees, and more. These fees can quickly build up and become a pain to handle, which is just another reason why everyone should develop an estate plan.
II. A Trust and Estate Plan Protects Children and Loved Ones
An estate plan starts with a trust. A trust can avoid probate after the death of the trustor and allows for the transferring of the deceased’s estate and sorting of affairs to be carried out privately. Not only can a trust manage all of your assets under one simple plan, but it can also convey your love and values to your loved ones and future generations of your family. Planning your estate also helps you organize your financial records, financial policies, titles, and other important documents to be readily available for your family to access after death. Ultimately, an estate plan eases the stress of children and loved ones to sort out your property and affairs after death.
III. Difference Between a Will and a Trust
A common misconception is the belief that a will and a trust are interchangeable. Both a will and a trust are important and should be included in an estate plan, but they do serve different distinct purposes. A will provides instructions for how you want your affairs to be handled and your estate to be distributed after you die. A will is legally enforceable, but it does not avoid probate. A trust, on the other hand, is a fiduciary relationship where another is granted authority to handle your assets for the benefit of the third party, the beneficiary. It brings all of the trustor’s assets together into a single private plan. Unlike a will, which only put into force after death, a trust is effective immediately. A trust will become operational at the time of the trustor’s death and can avoid probate at death. In order to avoid probate, families should ensure that a trust is drafted in their estate plan.
Now is the time to take action and save your loved ones the stress of going through probate by developing an estate plan. Carlson & Work has several expert estate planning attorneys in Reno, Nevada available to assist you in with your estate planning needs. Call Carlson & Work today at 775-298-6403.