Avoiding Probate – Is This The Way to Go?

Probate is a procedure whereby a court designated to deal with Will issues determines whether a Will is valid. This action must be taken before a disposition of the assets under the Will can be made. The probate process is public. Records are maintained by the Probate Court that are subject to public scrutiny.

Assets Passing Outside of Probate Not Subject To Public Scrutiny

When assets pass outside of the probate process the information regarding these assets is kept private. This prevents will contests.

Trusts are utilized to pass assets outside of the probate process. The most commonly used trust is called a Living Trust. Living Trusts can be revocable or irrevocable.

Testamentary Substitutes

For trusts to be successful in passing assets outside the probate process the assets need to be placed in the trust. An example would be deeding your house to the trust. This involves the preparation of a new deed. Other assets that pass outside of probate are called testamentary substitutes. These assets include life insurance, 401K plans, pension plans, retirement accounts, pay upon death accounts and stock brokerage accounts that have designated beneficiaries.

Convenience Accounts

Sometimes when a senior citizen starts to decline they add a child or other loved one to their financial accounts. They do this to have the child, friend or loved one assist them in paying their bills and maintaining their finances. Unfortunately, if the account is turned into a joint account, the convenience party added to the account can make a claim that he or she is entitled to inherit all the funds in this account. This action reduces the benefits received by the other beneficiaries. This may unintentionally create a discriminatory inheritance scheme among children of the decedent when it was the decedent’s intention to treat all of his or her children equally.

Estate Planning

A well designed estate plan coordinates the benefits that pass through Wills and Trusts with testamentary substitutes that pass pursuant to beneficiary designations in pensions, 401K plans, annuities, bank accounts, pay upon death accounts and designation of beneficiaries in stock plans.

When someone dies his or her estate should be handled in an orderly manner. It is important to have an experienced elder law or estates lawyer educate you how to maintain your assets for the purpose of seeing to it that your beneficiaries and loved ones are treated fairly and in the manner it which you seek to dispose of your assets upon your death. Failure to carefully review this matter with an experienced estate planning attorney may result in disputes, litigation, jealousy and long term family problems among your descendents.

Elliot S. Schlissel, Esq. Is a member of the National Academy of Elder lawyers. He practices in the area of Elder Law, Wills, Trusts, Estates, Estate Planning and Guardianships.
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