When someone passes and they distribute their assets, property, and personal effects through their will, the process is overseen by a probate court judge. The first thing that a judge does is contact your creditors in order to ensure that they are repaid from the proceeds of your estate. Afterward, whatever is left over is distributed to your heirs.
For those with larger estates, the probate process can be both cumbersome and time-consuming. And even for those with smaller estates, probate can still pose some problems. Probate is also a matter of public record. For those who enjoy their privacy and want to ensure that their property makes it to those they love, there is an alternative solution: A revocable living trust.
In this article, we’ll discuss problems with the probate process, and how a Montana estate planning attorney can help. To learn more, contact Silverman Law Office today.
Common Probate Problems That May Arise
There are a number of common issues with the probate process. These include:
- The valuation of the estate. For tax purposes, the estate and the property that it is comprised of must be evaluated by the IRS. In cases where the estate is worth more than $11M, the estate will be subject to an estate tax. In cases where the estate is close to that threshold, the stakes can be very high for evaluating the estate properly. Disputes can emerge when the estate comes just over $11M.
- Challenges to the validity of the will. One of your heirs who isn’t happy with the results can challenge the validity of the will. Though difficult to prove, challenging the will ties up the assets until the dispute is resolved. Heirs can claim that you were not of sound mind when the will was drafted or that there is a new copy of the will.
- The executor declines the role. It does happen sometimes that a named executor has no interest in the process of fulfilling that role. In that case, someone either can petition the court to become the executor or the court will have to appoint one at your own cost.
- Allegations against the executor. In some cases, benefactors may raise concerns about the executor upholding their fiduciary responsibility. This can also draw out the process.
Probate can lead to family conflicts, reduction of asset value, and other stresses. If you do have assets that must go through probate, it’s best to have an estate planning attorney who can provide guidance and legal advice.
Do I Need a Trust or Will?
Those who elect to pass their assets through a trust will still need a will. However, assets passed through the trust go directly to your heirs upon your passing. In addition, trusts are not a matter of public record, so any assets (other than real estate) that are passed through a trust can be done so anonymously. While creditors can still come after your estate to be repaid, it much more difficult (and expensive) for them to access assets in a trust than those that pass through probate. The creditor would be required to sue the trust.
Trusts can save you money, sometimes, but they also cost money to draft and create. There are a number of good reasons to create a living trust to distribute assets. However, saving money on taxes is not one of them. Typically, assets in the trust will be considered part of the estate so hiding assets in the trust to avoid eclipsing the threshold for the federal estate tax won’t work. You can save money on some kinds of taxes, however, if the trust is set up properly. An estate planning attorney can help.
What Are the Advantages of a Revocable Living Trust?
The largest benefit of a revocable living trust is that it can avoid the probate process, or, at the very least, assets in the trust will avoid probate. This will prevent them from becoming public record. However, certain asset transfers (such as real estate) are always a matter of public record.
Trusts can help you reduce potential issues arising from probate considerably. It is one of the major advantages of using trusts to distribute your assets this way.
Speak to a Montana Estate Planning Attorney to Learn More About Avoiding Probate Problems
At Silverman Law Office, we can help you avoid probate problems and alleviate the stress that comes with the process. Our Montana attorneys will carefully consider your individual needs and help you choose an estate plan that best fits your needs. Contact us today to learn more.