For Mark Roberts’ Use: Like many people, you probably spend a lot of time thinking about the most beneficial ways to accumulate adequate assets for retirement. But once you have accomplished that goal, you now how considerable assets to manage and protect. You also need to make a plan for those assets, in the event that you pass away before exhausting your retirement account and other holdings.
Many people making the mistake of assuming that signing a few beneficiary forms will cover most of the process. But unfortunately, much of your estate will be subject to a lengthy probate court process unless you take preventive steps to bypass it.
The purpose of probate court is to distribute your assets according to the law, or your final wishes if stated. Occasionally, the court also deals with disputes over your property. A few high-profile inheritance cases might come to mind. In most cases this process lasts from nine months to two years, but in exceptionally complex cases it can take much longer.
During this time, assets that you have left to your heirs will not be distributed to them. They must attend hearings with the court, and might also be subject to attorney fees in the meantime. Probate court can be expensive and stressful, and delay the grieving process.
As if that wasn’t enough of a headache, going through probate court means that the affairs of your estate will become subject to public record. If anyone checks these records, they can learn how much money each of your heirs received. This raises concerns about privacy and even the potential for crime.
Luckily, you can avoid most of these problems by bypassing probate court altogether. Establishing a trust in your later years will allow you to pass the entire estate directly to heirs.
Since trusts are complex legal maneuvers, they can be subject to different tax rules and even administrative fees. So seek the advice of an experienced estate planning attorney before making any decisions. You can also give us a call if you’re wondering how a trust might fit into your overall financial plan.