Many people are under the misconception that a valid will is enough to pass your property over to your heirs. Truth be told, there is an entire process involved even when a valid will is in place. This process is called Probate. Probate is administered through Surrogate’s Court and can sometimes last months if not years. Also, you have the threat of a will contest which is when a party is claiming you were not in the right mental state when forming your will. How can you resolve avoiding probate?
Establish a trust for yourself. A will is in effect at the time of your death whereas a trust is in effect as soon as it is created. A trust can apply to the control of your assets while your living and deceased. Another benefit with a trust is this: on average, attorneys charge 4%-7% of the fair market value of the estate in order to provide their services throughout the probate process. These costs are avoidable when creating a trust.
What is a Trust?
A trust is an arrangement where you have assets controlled by a trustee. The trustee disperses assets to your beneficiaries only as specified within the trust. You provide a specific time and situation when disbursements can be made to the beneficiary. For example, you may want your nephew to be provided with your old car as soon as he gets admitted to college. If he does not get admitted into college, per the trust, the car will not be transferred. You can also direct your trust to allow all of your property to be transferred to your selected beneficiary immediately at the time of your death. This is typically how probate is avoided. A trust is a powerful estate planning tool that one should seriously consider utilizing to save time, money, and grievances.