One of the legal issues many people fail to address is what will happen to their assets once they die. Death isn’t a topic many of us like to talk about, but the reality is that we all will and therefore should have an estate plan in place which specifies what are wishes are for how our assets and property should be distributed.
In the past, most people relied just on wills as their main source of estate planning. The problem with wills is that even in the best-case scenario where all heirs get along and no one questions what the person’s last wishes were, the estate still is require to go through the probate process. This process is overseen by the courts and typically takes 12 months before any of the assets and property can be dispersed to heirs.
Probate is not only time-consuming, but it can also be expensive, with attorney fees and the court fees. There is also the risk that someone who is not named in the will – purposely – could object to the will which can lead to an even longer probate process and also the risk the court will rule in that person’s favor. It is important to know when you as you draft up your wishes for your estate plans that there are other options available that avoid the probate process completely.
A living trust allows you to leave certain assets to certain beneficiaries without having to create a will. The assets are placed in the trust, which you have complete control over. You will need to pick someone as a trustee, who will be in charge of overseeing those assets when you pass. You can choose to either have all of the assets distributed at once, or you can set the trust up so the trustee continues to oversee the trust for as long as you deem fit, for example, in circumstances where the beneficiaries are children or young adults.
Joint Tenancy with Rights of Survivorship
Another way to avoid probate is to put make sure property you own is owned jointly with the person you want to inherit it. For example, if you want your son to inherit your home when you pass, the adding his name to the deed will ensure that when you die, the property will be automatically transferred to him. It is critical when you are considering this option to consult with an attorney, like a trusted Peoria IL probate attorney. There are some types of joint tenancy that do not transfer automatically upon one party’s death. In the other types, probate is still necessary.
Another way to avoid probate is to add beneficiaries to financial accounts, much the same way we do with life insurance policies. You can do this to any bank accounts, pensions, retirement accounts, IRAs, stocks, bonds, and other types of financial accounts. You can set these accounts up that the money is payable to the beneficiaries upon your death. If you do not name a beneficiary to your financial accounts, the probate will be required before the funds can be distributed to your heirs.
If you would like to find out the best way to set up your estate plan, contact a skilled estate planning attorney who can discuss all available options to you.
Thanks to our friends and contributors from Smith & Weer, P.C. for their insight into probate and estate planning.