Avoiding Probate

When someone dies, their will is submitted for probate, the legal process where a court determines if the will is valid and authentic. Probate ensures creditors are paid and that assets are distributed to the correct beneficiaries. If you pass without a will, you are considered to have died intestate, and the distribution of your assets will be determined by the court.

Probate
Probate

Probate expenses can range from hundreds of dollars to thousands depending on the on the value and complexity of the estate and whether a will or trust was in place. Additionally, probating a will makes it a public document eliminating any privacy of its contents and the probate process can delay the administering of your estate and draw it out over many months or even years.

Therefore many individuals try to avoid or reduce what is included in probate. An experienced attorney can help you avoid probate in several ways including the strategies below.

  • Designate Beneficiaries– Assets that have a beneficiary designation (such as life insurance, retirement, and bank accounts) will pass automatically to the named beneficiary, avoiding probate.
  • Title Assets Properly – Assets that are co-owned with a right of survivorship will pass automatically to the surviving co-owner without going through probate, such as a home owned by a married couple with a right of survivorship.
  • Use a Trust – Trusts avoid probate for assets that are transferred to the trust before death even though they may still be used during such lifetime. For assets that allow for a beneficiary designation, the trust can be named the beneficiary.
  • Pour-Over Will – When using a trust, one should also consider including a pour-over will to account for any assets that are missed or were not transferred to the trust. This document will transfer the remaining assets to the trust at death.

To get help with your estate planning or navigating the probate process contact Tarris Law at (540) 319-4111 or email us at info@TarrisLaw.com.

2 Steps to Create an Affordable Trust for Your Family

Trusts are used to protect your finances and to provide for your family if something happens to you. Having a trust may sound complicated and expensive, luckily they can easy and affordable. All it takes to step up an affordable trust are two easy steps, creating a trust as part of your will and obtaining life insurance to fund the trust.

1.) Create a Testamentary Trust as part of your Will

Meet with an attorney to draft or edit your will. This will should include a clause that creates a testamentary trust upon your death and provides your family with a nest egg. You will need to decide what purposes the trust funds should be used for, who will manage the trust, and how long it will be in effect.

Often people pick a financially responsible family member to manage the trust. This person ensures that funds are paid out slowly in order to provide the family with food, shelter, education, and other living expenses. These trusts may last the lifetime of a loved one but often they end once the child is a responsible age to manage the funds themselves, usually 25-35.  Additionally, as you set up the trust you may even decide how you would like the trust funds invested.

2.) Fund the trust with low-cost life insurance.

In order for the trust to provide for your family, it needs to be funded. If available this may be done with savings, however, this is not always practical for many young families. The most common option is using low-cost term life insurance. Many young families obtain policies paying $100,000 to $500,000 for under $19/month.

Trust for Young Family

Bonus Info: Individuals should also obtain a disability-income insurance policy to pay a living wage should they become disabled. Many people think about providing for their family if they die but not if they can’t work because of back pain.

Contact Us Now to Set Up Your Trust!