When you think about estate planning, the execution of a last will may come to mind. People often think that a last will can facilitate asset transfers very simply. In fact, this is not entirely true because of the existence of the process of probate.
If you maintain direct personal possession of your property and direct its distribution through the terms of a last will, the executor or personal representative must admit the will to probate. In the state of New York, the probate process is supervised by the Surrogate’s Court.
Probate provides certain protections, and the state offers a relatively efficient process. However, there are certain inherent drawbacks that cannot be avoided.
Probate takes time, and the heirs to the estate do not receive their inheritances until after the estate has been probated and closed by the court. This can be an inconvenience for some people, but it can create hardships for others who may have been dependent on the decedent for support.
The expenses that accumulate during probate can be considerable. There is a filing fee that is charged by the court, and the the executor is entitled to remuneration for his or her time and effort. In many cases there will be legal fees and accounting fees. Property appraisals and liquidation can be required as well. In the end, a noticeable portion of the estate can be consumed by probate expenses.
It is possible to implement probate avoidance strategies. There are a number of different ways to facilitate asset transfers outside of the process of probate. The optimal course of action will vary on a case-by-case basis.
People with estate tax exposure will want to implement wealth preservation strategies that simultaneously facilitate probate avoidance. Those who are not concerned about estate taxes or asset protection may want to consider the creation of a revocable living trust.
Revocable living trusts are very popular. When you create a revocable living trust, you don’t surrender control of the assets while you are living. You can act as the beneficiary and the trustee, and you can dissolve the trust if you choose to do so.
When you create the trust agreement you name a successor trustee and successor beneficiaries. After you die, the successor trustee distributes resources to the beneficiaries in accordance with your wishes. These distributions would not be subject to the probate process.
Learn More About Probate
If you would like to learn more about the process of probate, download our free report on the subject. This report should answer most of your questions, and you can obtain access through this website.
To get your copy, click the following link: Free Probate Report.