Among the many benefits of having a well-designed estate plan is making the process of administering your estate much less of a burden on your heirs and maximizing assets that can be passed to subsequent generations. Another benefit to be valued - privacy. Estate planning can help your estate avoid probate, the legal process of distributing your estate after you die that goes through the court system. This is a lengthy and expensive process, which becomes a matter of public record. Estate planning is by far a better way to go.
When estates are subject to probate, the process of administering the estate and distributing assets takes place through the court system - when it becomes public record. In "Unpacking the Perils of Probate," The Des Moines Register explains how to avoid probate by planning in advance to protect the privacy of your estate and your heirs.
With headlines of celebrity estates and the errors of the rich and famous, some people maintain that a will is all they need for their assets to be administered outside of probate. This is not true. A will "tells" a probate judge how you want your assets distributed through probate. To prevent your assets from going through the probate process, there are several steps you can take. Talk to a qualified estate planning attorney about them.
Designate Beneficiaries: Remember that life insurance policies and retirement accounts have beneficiary designations that direct who receives these benefits when you die. The will can't touch them. The article explains that assets covered by a beneficiary designation don't pass through probate. The designated beneficiary typically trumps what's in your will. You should make sure you review these designations regularly. If there's no beneficiary designated, that account may be subject to probate.
Set up a Trust: If you have quite a few assets that aren't covered by beneficiary designations, you can create a living trust to avoid probate. A trust can allow for more control when your assets are distributed after you pass. This is a very good benefit for those with minor children, if you don't want them to receive their inheritance in one lump sum. Trusts are more expensive to set up than just a will, so talk with an estate planning attorney to see if one makes sense for you.
No one wants to burden loved ones after we die. One way to be sure that your estate plan will save your heirs from delays, fees and migraines, is by working with an estate planning attorney to avoid probate.