When you plan your estate, you record the way that you want your assets to be distributed after you are gone. This can seem like the end of the story, but who will do what it takes to turn these wishes into reality after you are gone, and how will it be done?
It is important to think about the process of estate administration when you are devising your plan. When you know the facts, it may influence your thinking with regard to the asset transfer method that you use.
Simple Wills and Probate
A lot of people are under the impression that a will is the only estate planning document that you should ever consider unless you are a multimillionaire. The idea is that trusts are for the wealthy.
When you use a will, the assets wind up in the hands of your heirs quickly and efficiently, right?
In reality, both of these assumptions are completely false. There are trusts that are very useful for ordinary people, and the will administration process is actually quite complicated.
If you use a will as the centerpiece of your estate plan, you would name an executor to act as the administrator. After you pass away, the executor would not be able to distribute the resources to the inheritors without any type of supervision.
Under the laws of the state of Michigan, the will would be admitted to probate, and the probate court would preside. This process will take a minimum of seven months to run its course, and more complicated cases can take considerably longer.
There are expenses that pile up during probate, and there is a loss of privacy. Anyone that is interested can access probate records to find out how the resources were distributed.
This is a major negative, because nobody likes to lose their privacy. Plus, too much information can cause hard feelings among interested parties, and the ill will can linger for a long time.
A revocable living trust is the estate planning tool that is the best choice for the widest range of people.
As the name would indicate, you don’t have to worry about losing control of the assets, because you can dissolve the trust entirely at any time. You would then take back direct personal possession of the property that you conveyed into it.
This may sound comforting, and you really do not lose any control of the assets while you are alive and the trust is intact.
You can act as the trustee, so you would have direct access to all of the property that you signed over to the trust. In a real sense, there is no change in the way the you conduct your life on a daily basis.
When you establish the trust, you would name a successor beneficiary to take over after your passing, and your heirs would be the beneficiaries. The trustee would follow your written instructions and distribute assets outside of probate, so the drawbacks would be avoided.
We are highlighting the revocable living trust because it is commonly used, but there are other types of trusts that can satisfy certain objectives. With all trusts, you can name someone that you know to act as the trustee, and there are also professionals that can be engaged.
We Are Here to Help!
If you would like to discuss your estate planning options with a licensed attorney, our doors are open. We can explain everything in detail, including the estate administration process, and make recommendations.
When you make your final decisions, we can help you craft a tailor-made plan that is ideal for you and your family.