What is an Estate Plan?
Everyone needs to get their affairs in order at some point in their lives. And “everyone” does not mean “only rich people”.
- If you have family or other loved ones, then planning for the latter part of your life becomes essential.
- You’ll want to have a plan in place in the event you suffer a serious illness and need someone to be making decisions for you.
- You’ll also need to decide who should receive your assets when you die.
In general, people require some kind of an estate plan, and if you own a home, then that estate plan will center around a living trust. A living trust is designed to pass your assets to your loved ones as you planned and eliminate the delay and cost of probate.
What is Probate?
Probate is the formal court process for administering a person’s estate.
If that person dies without having done any planning at all, or dies with only a will—without having created a living trust—that person’s heirs will have to go through probate.
- Probate is very expensive (often costing literally tens of thousands of dollars in fees to attorneys and others), and it will take your heirs at least a year to go through the very public and stressful process.
- Unless you have taken measures to avoid it (by creating a living trust), your estate will have to go through probate.
- An estate is subject to probate if it is greater than $184,250 in value.
- Avoiding probate is one of the most significant benefits of a living trust.
- To avoid probate, a person or a married couple can place their assets in “trust” while keeping full control over their property.
- The trust will have actual ownership of the property, although you own the trust throughout your lifetime.
- All property transferred into the living trust will be left out of the probate process.