Avoiding Probate and Protecting Your Loved Ones

After you pass away, your estate could be subject to the probate process. In the event that you have not created a detailed estate plan, or placed your assets in a trust, your family members could endure a lengthy, stressful, and costly court proceeding which lasts for months or even a year or more. They might remain financially vulnerable during this time, or assets might not be transferred in the manner that you would have wanted. Without proper estate planning (not to mention tax planning) created in advance, much of your assets might not even reach your beneficiaries.

There are several ways to avoid the probate process, saving your loved ones considerable time, money, and emotional distress. Certain assets are transferred directly to named beneficiaries upon your death, including:

  • Life insurance payouts
  • Qualified or non-qualified retirement plans, such as IRAs and 401(k) accounts
  • Certain types of trusteed or jointly held bank accounts
  • Pay-on-death assets, such as US savings bonds (if you have elected this option)
  • And, of course, a properly drafted and established estate planning trust

That sounds fairly straightforward, right? All you have to do is designate the person of your choice on these assets, and bingo, all of your estate planning problems are solved?

Not so fast! Nothing is that easy. It would be great if it worked that way, but the law can be much more complicated than we sometimes like to admit. Depending upon the choices you make (or do not make), your beneficiaries could be subject to a large tax burden on assets you pass along to them. On the other hand, there are ways to structure your estate plan so that your beneficiaries bypass avoidable obstacles and maximize their inheritance (e.g., your hard earned cash). It unfortunately isn’t as simple as filling out a few beneficiary forms and then forgetting it.

Because the estate planning process is subject to so many tax and probate pitfalls, you should consult an estate planning and/or tax attorney before making your final decisions. You’ve worked hard to ensure that your loved ones are financially comfortable in the event that you pass away; now, it’s time to consult with an expert to ensure that your plans are followed precisely, and your beneficiaries aren’t saddled with any unexpected tax burdens. Call us to schedule an appointment, and our estate planning attorney will review your plans and answer your questions.


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