Westchester Estate Planning Attorney OfficeWhen someone passes away, the legal process in which their assets get properly distributed—to designate heirs and pay off debt—is known as probate. The probate court will first assign someone to manage the estate, choosing one if there is no will or if the will doesn’t appoint one. The deceased individual’s properties and assets get cataloged, appraised, then designated to heirs according to the will. If there is no will, the distribution of the decedent’s property will yield to State probate law. All debt and taxes owed by the departed—including lawyers and court fees get paid off with probate assets. For a lot of people, avoiding probate is the best way to prevent all those costs, which could take up a large sum of what the heirs would have received. Read on to learn how to avoid probate and save your loved one’s hard-earned money from unnecessary fees, penalties, and taxes. |
|
What Types of Assets are Subject to Probate?
Many assets may not be subject to probate, and get passed on to the beneficiaries automatically without including a probate court. Assets subject to probate include those that aren’t under a trust, don’t have an established beneficiary or heir, and aren’t jointly owned. Property with tenants in common—which several individuals share ownership of, will go through probate to find an appropriate heir to the decedent’s share in ownership.
How to Avoid Probate in California?
There are several ways to avoid putting your assets through probate when you pass, including:
- Create a Living Trust
Assets under a living trust get passed on to the designated beneficiaries automatically without going through probate. Avoiding court and lawyer fees, taxes, and other costs amidst a great expense of time and effort. - Establish Beneficiaries
Many assets such as bank accounts give owners the option of naming a successor, so the account gets transferred automatically to the heir without the need for probate. - Joint Ownership
Joint ownership (also known as joint tenancy) is when two or more people—own an equal share of the asset—such as a married couple. When one of the owners pass, the other owner(s) absorb their share. Not to be mistaken with tenants in common, in which two or more people share ownership, but instead of the other owner(s) absorbing the decedent’s share, it gets passed down to a beneficiary in the probate process. Joint ownership with rights of survivorship is a great way to bypass probate and expedite distribution of your wealth to your loved ones.
What is a Living Trust?
A Trust is an arrangement where money, real estate, or other assets are transferred from the settlor to be managed and administered for the benefit of another pursuant to the terms of the Trust.
- Revocable Living Trust
The revocable living Trust is created by a written document, known as a Trust instrument, and funding of the Trust should occur at the same time as the execution of the Trust instrument, or shortly thereafter. Most often the grantor or settlor, the creator of the Trust, and Trustee, the administrator of the Trust, are the same individual, and the grantor or settlor reserves the right to revoke or amend the Trust at any time. The main attraction of Revocable Living Trust is the avoidance of probate upon the grantor or settlor’s death. Probate is avoided because the Trust assets are owned by the Trust rather than the grantor or settlor. Also, if a grantor or settlor has properties in several states, the cost of probate administration is avoided because the administration is consolidated with one Trust instrument. The property held in the Trust will pass at the grantor or settlor’s death free of probate unless the Trust estate is to be distributed to the Personal Representative of the probate estate. - Irrevocable Living Trust
A revocable Trust is a Trust where the Trust can be modified, amended, or revoked; an irrevocable Trust is a Trust, which, by its terms, cannot be modified, amended, or revoked. What does this mean? While the Revocable Living Trust allows the grantor or settlor to retain some asset control, has flexibility and avoids the costs and duration of probate, the tradeoff is that the assets in the Trust do not avoid the estate tax. With an Irrevocable Living Trust the grantor or settlor’s control is ceded, but the estate tax is avoided.
How Can I Transfer Assets To The Trust?
You should transfer title to the Trust the way it normally would happen: with a deed for real property; a vehicle title for a car; or a bill of sale for personal property. If you have a mortgage, you should contact the lender to find out if they will permit the transfer. The transfer to the Trust will be effective and perfected when the deed is signed, documented and recorded. A bill of sale is used to transfer most personal property. Anything not transferred to the Trust may be subject to probate. Because personal property may be purchased after the date of the bill of sale, periodic transfers would need to be made or purchase may be made directly by the trust with its cash, bank note or credit card.
Do I need to hire a Westchester Estate Planning Attorney?
Creating a living trust entails cataloging all your assets, corresponding paperwork, titles, deeds, certificates, and choosing beneficiaries for those assets. It’s a complex legal process and you should hire an attorney to prepare the documents and create the living trust for you to cover all your bases and avoid negative legal implications. Give us a call for a free consultation with our Westchester Estate Planning Attorney office at (800) 603-3900.
Unlimited Legal Advice: $139.95 Per Year
9 Locations in 9 American States
1-800-603-3900
★★★★★