Estate Planning Probate: How to Protect Inheritance Assets

Estate planning probate is a financial planning strategy used to protect inheritance assets from undergoing the probate process. Probate is initiated when a person dies. The average probated case takes six to nine months to complete. All assets are held in probate until the decedent’s Last Will and Testament is validated, outstanding debts are paid and a judge signs off on the estate.

Many people procrastinate about estate planning probate. Unfortunately, death can arrive when we least expect it. Dying without engaging in estate planning creates a heavy burden for your family and loved ones. This can easily be avoided by executing a last will or establishing a trust.

Executing a last will is relatively easy. Much depends on the value of your estate and the assets you own. The most common way to execute a Will is to hire a probate attorney or estate planner. These professionals can offer advice and guidance on which estate planning strategies provide the most protection to heirs and beneficiaries.

A probate executor is designated within the Will. This individual will be managing your estate. They will have access to your financial information and are responsible for paying outstanding debts and taxes; submitting legal documents for transfer of financial and real estate holdings; and distribution of inheritance assets once probate settles.

Probate laws are governed by each individual state. The Will must be validated through the court to ensure it is legally-binding and abides by probate laws. When a person dies intestate (without a Will) inheritance assets will be distributed to the surviving spouse or direct lineage relatives including children, parents or siblings.

The value of assets held in probate can depreciate over time. If the estate does not possess the financial means to pay outstanding debts, the court can order real estate or financial holdings be sold to cover expenses. Add in probate costs and legal fees and inheritance assets can quickly be depleted; leaving nothing for intended heirs.

Options exist for avoiding the probate process altogether. Estate planners can assist with executing an iron-clad Will, power of attorney, healthcare proxies, and the establishment of payable-on-death and transfer-on-death accounts which allow assets to quickly transfer to named beneficiaries.

Estates valued over $100,000 should engage in estate planning probate to establish a trust. Several types of trusts exist including irrevocable and revocable trusts and irrevocable life insurance trusts. Each type of trust offers protection of assets not available through a basic last will.

Establishing a trust exempts estates from the probate process and allows decedent’s to maintain their privacy. Last wills are a matter of public record which can be viewed by anyone who wants to see them. Trusts are private and can only be viewed by lawyers, judges and named beneficiaries. Additionally, inheritance property protected through estate trusts is usually exempt from taxation.

Estate planning probate is not a difficult task. All that is required is to legally document assets and personal belongings you own and who you wish to receive the property when you die. When major changes occur, trusts and wills should be updated to document changes. For example, if the designated probate executor dies or is unable to fulfill duties, the will or trust needs to be changed to designate a new estate administrator.



Source by Simon Volkov

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