Probate

Monday, December 20, 2010

What is Probate?

Most married couples never come in contact with the probate until a parent, sibling, or spouse dies which has to be the worst time to get an education on the probate process. We have seen brothers and/or sisters become absolute bitter enemies because of the failure to update wills.

Today, more and more people are becoming aware of the costly time delays of the estate settlement process, mainly the most important part, "Probate." What is Probate? It is the legal procedure by which one obtains clear title of an inherited asset such as real estate, cash, stocks, bonds, personal effects, and virtually every item a person would own.

So, why all the complications? There are several factors involved. Someone must determine what type of asset it is and how it is owned and titled. This may sound simple enough, but just think for one minute about all of your assets. Many people spend a lifetime accumulating their worth and possessions, but so few ever keep a record of everything they buy or own over their lifetime. With this in mind, it is easy to understand the overwhelming task of correctly documenting each and every item in a persons estate. The probate process is costly regardless the size of your estate and it is a common misconception that a Will avoids probate (which is simply not true). The probate process typically cost anywhere from 10% to 15% of each estate.

So, what is the solution? For most people, a Living Trust is the answer. If set up correctly, your assets will be distributed after your death to the correct beneficiaries without the intervention and time delays of the probate process and the fees associated with it. How does this work? Well, let's go back to what probate is. It is the legal procedure by which one obtains clear title of an inherited asset. By utilizing a Living Trust, you clear your name from the asset while you are alive so there is no need for probate after you pass away.

Posted in Legal Planning , Living Trust , Wills | Make a Comment (2)

1. Clyde Godwin on December 20, 2010 @ 4:29 PM

"My parents were told by a local attorney that all they needed was a will and as it turned out they were very misguided. There estate was valued at just over $900,000 and after fees and taxes my brother and I only walked away with $130,000 a piece and the attorney was able to walk away with just over $95,000. In addition, my brother and I have fought for years over certain items without any resolution. It would have almost been better if we had never received anything at all."

2. Kyle B. Carlton on January 3, 2011 @ 10:16 PM

"Clyde, unfortunately, your story is very common. The "Human Elements" of estate and financial planning are commonly overlooked while inadequate and unsuitable planning techniques are pushed on consumers by greedy planners. Thank you for sharing however, I am sorry to hear about the unfortunate outcome. Just make sure to pass along your experience to others so they do not make the same mistake."

Reply to this Post: