This column is about a topic that most do not like to discuss and try to avoid at all costs. Unfortunately, it might cost you everything once a person passes away. In fact, this might be the most important topic you read about today.
Do you realize that your estate could get settled under the supervision of the court? And that without a current and updated Will, your true wishes may not be fulfilled?
Probate is the formal legal process that gives recognition to a Will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries. Most probate proceedings are neither expensive nor prolonged.
The basic job of administration and accounting for assets must be done whether the estate is handled by an executor in probate or whether probate is avoided because all assets were transferred to a living trust during lifetime or jointly owned.
In Georgia, similar to many states, they have simplified or streamlined the probate processes over the years. In planning your estate, more important than minimizing probate is minimizing the real issues that can make probate difficult, such as lawsuits by heirs.
The living trust is often marketed as a vehicle that allows you to “avoid probate” upon your death. Probate is the court-supervised process of administering your estate and transferring your property at death pursuant to the terms of your Will.
There are several types of property that routinely pass outside of the probate process, such as life insurance, retirement plan proceeds and house deeds. These pass to a named beneficiary by designation rather than pursuant to your Will, and real estate, bank or brokerage accounts held in joint names with right of survivorship.
While it is true that the property passing under the terms of a living trust upon your death will “avoid probate,” it should be noted that there may or may not be actual value in that result.
There are four acceptable legal grounds for contesting a Will:
1. The Will was not signed in accordance with the law.
2. The signer did not have the capacity to sign the Will, potentially due to illness.
3. The signer was influenced to sign through threats and verbal abuse.
4. The Will was procured by fraud.
Property that passes at death through a revocable living trust must be transferred to the trust, administered by a trustee who may or may not charge fees, and then transferred out of the trust to the beneficiaries. There may be other costs, such as real estate transfer taxes or fees, depending upon the jurisdiction. The costs associated with these steps and the costs associated with tax filings are often ignored by living trust marketers. A comparison of the costs of probate and those of a living trust should be made on a case by case basis.
Living trusts, in fact, have great value as part of estate planning, but not necessarily to avoid probate. A living trust, if properly prepared and administered, can be a very effective tool to manage assets in the event of illness, disability or the effects of aging. In light of the aging population, the use of living trusts to minimize the risk of elder financial abuse and address similar issues, should be an important consideration in an estate plan.
If you need help understanding the complexities of estate planning, please contact Miller & Wynn. Our locally-based attorneys have decades of experience. We’ve excited to announce a new partnership with civil litigation attorney Patricia Roy. Please contact Mike Miller or Christopher L. Wynn for a free consultation at 770-942-2720 or visit www.MillerWynnLaw.com.
Call the Miller & Wynn Law Firm and get your questions answered quickly and economically, and most important… protect your family.