You want to ensure your beneficiaries receive what you left them in your will as quickly as possible, but you know probate could prolong the process. How far out of your way should you go to avoid probate?
American Bar Association explains reasons probate takes time. Understand the probate timeline to better refine your estate planning strategy.
Not as bad as it seems
Think twice before creating a living trust specifically to sidestep probate. A lot of property falls outside probate, even without the existence of a living trust. Examples of such property include retirement plans and life insurance payouts and brokerage accounts held jointly with the right of survivorship.
The “value” of avoiding probate
When weighing the benefits of avoiding probate, think about current state law. For instance, some states have a mandatory attorney or court fees, and other states simplify or accelerate the probate process. Crafting well-worded estate planning documents speeds up probate. Your estate planning strategy may do little to eliminate the delay triggered by tax filing regulations and laws.
Timeline and costs
The trust you set up for your estate also affects how long it takes to go through probate. For example, property funneled through a revocable living trust must first shift to the trust, where the trustee administering the trust could charge fees, then the property moves through the trust before beneficiaries own it. Besides how long it takes for a property to move through the trust, you must also account for property transfer fees and taxes.
Before avoiding probate, learn the benefits of the process and unavoidable laws and fees. Understanding every aspect of estate planning helps you develop a strategy that meets your needs.