Estate Planning Lawyer in Palatine, IL
You may have watched a scene depicted on a television show or in a movie that takes place after a funeral. People all gather at a reception in someone’s home, and the executor of the estate calls certain people into a study or extra room. There is a “reading of the will” at that time, and the implication is that the executor will be able to distribute assets to the inheritors after they are informed about the intentions of the deceased individual.
In reality, things do not work in this fashion. If you pass away with a last will in place, the executor or personal representative would be required to admit the will to probate. The administrator that you choose would take care of the hands-on tasks, and the court would provide supervision during the probate process.
Probate is in place for a couple of different reasons, but it is not necessarily a positive thing for people that are in line for inheritances.
One of the major drawbacks of probate from an inheritor’s perspective is the time factor. Even if there are no major complications, it will usually take nine months to a year for probate to run its course. No inheritances can be distributed during this process, and that can be a long time to wait.
There are also a number of different expenses that accumulate. These would include a filing fee, legal expenses, liquidation and appraisal charges, the executor’s remuneration, and other incidentals. All of the money that is spent during probate is essentially coming out of the pockets of the people that are named in the last will.
Privacy is lost during probate as well. It is a public proceeding, so anyone that is interested can access probate records to find out how you distributed your assets if you use a will. This can be disconcerting in a general sense, but this knowledge can potentially cause hard feelings among interested parties.
There are some asset transfer methods that are not subject to probate. In some cases, people will intentionally use these “easy answers” to avoid probate, and in others, it happens organically. However, unless you make informed decisions with the help of an estate planning attorney, negative consequences can come about.
With the above in mind, property that is held in joint tenancy can be transferred free of probate. So, if you were to add a joint tenant to the title or deed to your home, that individual would inherit the property after your passing, and the probate court would not be involved.
However, there are some potential problems with joint tenancy. When you add a joint tenant, this individual would own half of the property immediately. Therefore, if the person was to become the target of a lawsuit, the portion of the property that is owned by the joint tenant would be in play. The co-owner would also have to be cooperative in order for you to be able to sell the property.
Payable on death accounts can be opened at banks and some brokerages. If you start a payable on death or transfer on death account, you add a beneficiary. After your passing, this individual would assume ownership of assets that remain in the account, and the probate process would not be a factor.
This may sound like a simple solution, but there are limitations involved if you take this course of action. You could add multiple beneficiaries, but you would have to allow for equal distribution of the assets. This may not be consistent with your wishes, and what about the rest of your property?
An estate planning lawyer in Palatine, IL would say that the best way to avoid probate is to establish a revocable living trust. After you create and fund the trust, you can serve as the beneficiary and the trustee while you are living. In the document, you name successors to assume these roles after you pass away. When the time comes, the successor trustee would be empowered to distribute assets to the beneficiaries in accordance with your wishes outside of probate.
Contact Bott & Associates for their insight into estate planning and administration.