Knowing your options is essential
When it comes to planning the distribution of assets, it's important to understand probate, the purpose it serves and whether it's necessary for your particular situation. Unfortunately, many people don't know what probate is until they've lost a family member. Planning ahead by consulting with a trusted attorney can make a world of difference, even easing the stress of the decisions that must be made after losing a loved one.
Defining probate
Probate is a sometimes-lengthy process of verifying the legality of an individual's last will and testament and ensuring the individual's wishes are carried out appropriately. In cases where the individual does not have a will in place before their passing, probate will help determine the appropriate distribution of the individual's estate. Probate can take a few months for a simple estate and years for a contested estate or complex situation.
Not all of an individual's assets go through probate. In fact, several assets such as life insurance policies, bank accounts and even retirement funds can be transferred seamlessly to the surviving beneficiary. Also, assets in a trust are transferred independently of probate, per the terms specified.
Passing assets via a last will and testament, which is how probate begins, can be more or less expensive than other options, like the trust mentioned above.
Other options exist for estate planning
The concept of probate can be overwhelming and seemingly complex at the very least. Though the process is common, most of us don't go through it very often — and in the wake of enduring a personal loss, it can feel intimidating. At its core, however, probate is simply a process for a judge to legally approve the distribution of assets regardless of whether there is a last will and testament in place. Understandably, some people would prefer to avoid probate, and there are options that can help reduce legal fees, minimize taxes, save time and protect the privacy of those involved.
A revocable living trust allows individuals to place assets into a trust that, upon their death, transition to beneficiaries without probate. Certain retirement account benefits and payable-on-death accounts, along with life insurance, can be transferred after the owner's passing to the beneficiary named. Real estate property owned by joint tenants or tenants in common passes directly to those specified. Depending upon the situation, other types of trusts can also simplify the asset distribution process, with benefits going to the beneficiary without probate. Keep in mind the involvement of beneficiaries who are minors can create another layer of complication, and no two estate settlements are exactly alike.
The value of an estate planning attorney
Because of concerns about cost, time and privacy, one of the most frequent goals of estate planning is to avoid probate. Of course, every individual situation and every family's dynamics and preferences are different, so discussing your options and considering the pros and cons of each is vitally important. It can provide some peace of mind to work with an attorney who is experienced in estate planning and elder law for guidance on your choices, their benefits and limitations, and the options that might be right for you and your loved ones.
Article by Steve Doyle, estate planning lawyer in La Crosse WI office of Johns, Flaherty & Collins. For an estate planning attorney in La Crosse, call him at (608) 784-5678.