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What Is Probate and Why Should You Endeavor to Avoid It?

What Is Probate and Why Should You Endeavor to Avoid It? on stuartplanning.com

By Jack Owen, Jr. Esquire, CPA, Estate Planning Attorney and CPA, and Craig Kirsner, MBA, President of Stuart Estate Planning Wealth Advisors

The probate process can last for more than a year and can be expensive. By planning ahead, you can ensure that your estate won’t enter probate after your death.

If a deceased person created a will before their death, the estate could enter probate after they die. The court oversees this process, which consists of collecting all assets, paying the deceased’s debts, and distributing the assets to the beneficiaries, per the will.

But the probate process can sometimes take years and can be extremely complex and expensive. How do you approach estate planning so that this process can be avoided?

First, let’s look at what probate consists of and how it can take a huge toll on family and loved ones. We’ll then look at strategies you can take to avoid it.

What is probate?

Probate is a process in the legal system that begins with a will review if there was one left by a deceased person. If a person died without a will in place (this is known as “intestate”), the estate could still enter probate to determine how to distribute assets.

The court first ensures that the will is valid and authentic. The terms of the will are then assessed and an executor or a personal representative is appointed by the court. Often, the deceased person would have already named an executor or a personal representative in the will. The executor or representative oversees the asset collection and distribution process. This consists of paying any debts or liabilities and then figuring out how to distribute everything to the named or natural beneficiaries of the deceased person.

It sounds simple enough but unfortunately, in Florida, the probate process can take up to two years to complete depending on the type of assets in the estate. Not only is a family dealing with the death of a loved one, but they could be tied up in court for a long time trying to figure out estate distribution.

Common considerations in probate court could be whether your will conflicts with state law in any way, if it is adequately updated, or if you were mentally competent when you created and signed the will. Another downside is that the probate court costs are usually paid for from the estate and can be up to 5% of the estate’s value. Probate attorneys can also require high fees for this process.

Finally, if a will goes into probate, it can be made public. Certain of the court documents and records relating to your specific case can be made available to anyone who wants to see them. For those families that want assets and beneficiaries to remain private, this can be a difficult part of the probate process to handle.

How can you avoid probate?

Many people believe that if they have a will, everything will be straightforward and simple for their family to manage when they die. However, this isn’t always the case, especially if you have a large estate. Taking the time to focus on legacy and estate planning will ensure that your assets are protected and that they won’t be tied up in probate court for years.

If you only have a will by itself, your estate may enter probate after your death. However, if you take additional steps to set up your estate properly, you can avoid the probate process completely.

A revocable living trust ensures that your estate won’t enter probate if the assets subject to probate are titled in the name of the trust. These steps will help your loved ones avoid unnecessary stress, administrative delays, and legal fees when dealing with the estate.

A revocable dynasty trust is a great option. These trusts are designed to help protect the assets you leave to your family, including children and grandchildren, allowing this property to continue to stay in your family for generations. Bloodline protection also helps to ensure that these trusts last for several generations and can protect inherited property against divorces, lawsuits, or creditor claims that may come up in the future.

Because this type of trust is revocable, you are allowed to make changes to it at any time before you pass. The trust then becomes irrevocable after you die, meaning no changes can be made when the assets are then left to your heirs.

The dynasty trust allows you to protect your assets inherited by your beneficiaries, which is why it’s one of the best estate planning tools available. You can stipulate which heirs get what, as well as how and when they receive the assets, and you can continue to make changes to it throughout your life. If you become incapacitated or die, these specific wishes are then protected.

With proper planning and re-titling of assets, the dynasty trust can avoid the tedious probate court process and its associated fees. Funding and setting up your living trust while you’re alive allow for the least amount of assets to pass through the probate process.

To learn more about investments and dynasty estate planning, come to one of our upcoming dinner workshops at Ruth’s Chris or Abe & Louie’s steakhouse in Boca Raton or Fort Lauderdale. Call 1-800-807-5558 for details or to RSVP.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Stuart Estate Planning Wealth Advisors have not affiliated companies. Stuart Estate Planning Wealth Advisors is an independent financial services firm that creates retirement strategies using a variety of investment and insurance products. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to safety and security generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.  Stuart Estate Planning Wealth Advisors does not give legal advice.  Jack Owen, Jr., Esq., CPA is not affiliated with Stuart Estate Planning Wealth Advisors.  Jack Owen, Jr. Esq. office location: 4500 PGA Blvd., Suite 200, Palm Beach Gardens, Florida 33418.  690566

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