All You Need to Know About Probate and Estate Planning
Most people do not realize that probate and wills are not just for the rich. If you were to die tomorrow and do not have a will, then in most cases, the government will have no idea who the money should go to and how much should go to each of your kin. Ultimately, lawyers will have to be consulted and unnecessary legal charges will be incurred. What’s more, this entire process could lead to bitterness in the family. It is thus a good idea to make a will as it is bound to save your surviving family members a significant headache.
The first thing you need to understand is that probate is a legal process which helps transfer your money/assets to your next of kin. In each state, the amount of money/property you can transfer to your heir varies. Another important thing to note is that probate also notifies the public and the creditors if they have any claims against the estate. The creditors usually get their share first and the rest is then divided among the beneficiaries according to the will. If there is no will then the state will decide how to divide the assets.
The process of probate costs money, which also varies depending on the size of the estate. The legal fees are usually deducted from the estate. Plus the process of probate can also take anywhere from 6-12 months and in many cases, the information goes public. So for people who not want to avoid all this hassle, the best advice is to make a will and to delegate the beneficiaries of your assets.
It is also important to know that not all assets have to undergo the probate process. For example, if a couple owned a home jointly, then after the death of one spouse, the surviving spouse automatically gets the home. But if the second spouse dies, a probate is necessary. However, in many cases, it is possible to avoid all assets to go through the probate process by having what is called a ‘revocable living trust.’ This living ‘trust’ can be changed or canceled anytime as long as you are alive.
Please note that a living trust also requires hiring an estate planning lawyer and the basic fee is $1,000- $2,000 but for more complicated estate issues, the fees can run into many thousands of dollars. The other option is to make a will and detail everything on how you want your assets divided among your kin and even delegate an executor of your will.
If all this sounds too complicated, the best advice is to speak to an estate planning lawyer and let him or her decide what is best for you. A few hundred dollars spent on this venture while you’re alive will save your beneficiaries an enormous headache and agony in the event of your death.