There are some things that you should understand about a last will before you decide that this is the right vehicle of asset transfer for you.
The Process of Probate
If you use a will to transfer your assets, you name an executor. This is the estate administrator.
When you maintain sole and direct personal possession of your property and arrange for its transfer through the terms of a will, the executor must admit the will to probate after your passing. The people that are named in your will as inheritors can’t receive their inheritances until after the estate has been probated and closed by the court.
This is a process that does not run its course overnight. The exact duration of probate will vary depending on the jurisdiction. It will take a number of months at minimum, and there are probate cases that can take years.
Clearly, you want your loved ones to receive their inheritances in a timely manner, so this is a drawback.
In addition to the time consumption, there is another major drawback that goes along with the probate process. Considerable expenses can accumulate while the estate is being probated. The court charges a filing fee, and the executor is entitled to payment for his or her time and trouble.
Because probate is a legal process, the executor will typically bring in a probate attorney. Final taxes must be paid during probate, so a tax accountant is often necessary. There can also be appraisal and liquidation expenses.
All in all, probate expenses can ultimately consume a noticeable portion of an estate. Money that is spent during probate would have otherwise gone to the heirs.
There is a third drawback that can be disconcerting to many people. Probate is a public proceeding, so anyone who wants to access the records can find out exactly how you planned your estate. For one reason or another, you may want your final affairs to be conducted confidentially.
Timely Asset Transfers
It is possible to arrange for timely and efficient asset transfers outside of the legal process of probate. One very popular probate avoidance tool is the revocable living trust.
With this type of trust you maintain control of the assets while you are living. After you die, the trustee that you choose can distribute assets to the beneficiaries in a timely manner, and probate would not be a factor.
This is one option, but there are other ways that probate can be avoided.
Learn More About Probate
If you would like to learn more about the process of probate, download our free report on the subject. You can obtain access to your copy through this link: Free Probate Report.
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