Is it really possible to avoid probate?

Braverman Law Group, LLC — Fri, 27 Apr 2018 07:00:00 GMT

As soon as one begins looking into estate planning and creating a plan to leave property to heirs and beneficiaries, it doesn’t take long to run up against the looming possibility of probate. When an estate passes through probate, the state assumes an individual’s estate and distributes it, but at great potential expense to the value of the estate and significantly increasing the amount of time that beneficiaries must wait to receive anything.

For many individuals, estate planning focuses on circumventing the probate process entirely or working to reduce the portion of one’s estate that the process affects and the amount of time it takes to resolve the matter. While avoiding probate is not always possible, it is generally better for all parties involved for anyone with significant assets to consider how they might deal with probate before the state steps in.

If you believe that your estate may have to pass through probate, it is wise to address this issue as soon as you can, with great attention to detail. You may find that you have more legal tools and opportunities available than you realize to protect your estate and your interests.

Does everyone deal with probate?

Each state maintains its own laws that dictate whose estates must pass through probate. Clearly, forcing a person with very little to his or her name to pass an estate through probate would likely diminish the value of the estate severely and may cost more to execute than the worth of the estate itself.

In Colorado, only estates that exceed $60,000 are subject to probate, meaning that an estate that does not exceed that threshold does not need to pass through probate upon the death of the estate’s owner.

How can an estate avoid probate if it exceeds the threshold?

If an estate does exceed the threshold, then it must pass through probate, so how is it possible to avoid probate at all for anyone who owns a home or builds up even modest assets? For many individuals, establishing a trust to hold their property and reduce their personal net worth is sufficient.

When an individual creates a trust, he or she essentially creates a legal box that can hold property on behalf of that individual. Depending on the type of trust one chooses, this may mean that the creator of the trust must determine how the trust operates and the restrictions the creator must obey, because the property placed within the trust no longer legally belongs to trust creator.

Once created, a trust holds the creator’s property, allowing limited access to the assets in return for legal protections for the assets themselves and the trust creator. Among these benefits is the ability to bypass probate by reducing the personal net worth of the trust creator below the probate threshold.

If you believe a trust of your own may address your estate planning concerns, do not hesitate to use the legal resources you have to create a trust that protects your property and your rights, establishing the legacy that you wish to leave.

Estate planning without children might be challenging

Braverman Law Group, LLC — Tue, 24 Apr 2018 07:00:00 GMT

There are many different challenging situations that come up when you are creating an estate plan. For adults who haven’t had children, there are some unique obstacles that must be faced. In many cases, these individuals might think that they don’t need an estate plan, but this is far from the truth.

All adults need an estate plan. Here are some important considerations for people who don’t have any children who can benefit from the transfer of assets after you die:

You have options for heirs

Just because you don’t have children doesn’t mean that you don’t have options about who is going to get what you’ve worked hard for. You do have choices to make right now so that you can ensure your wishes are being followed.

You might decide to leave everything to another relative. Your parents, siblings, cousins, aunts or uncles might be able to put what you leave to them to good use. You also have the option of leaving assets to a favorite charity or group of charities.

There is also the possibility of putting your assets to work for you now. You might choose to put them into an annuity account so that they can give you a benefit while you are still alive. You would have a regular income from them.

Consider tax implications

The tax implications of the estate plan are a big consideration. You have to make sure that the taxes don’t take up the majority of what you leave to someone else. Learn your options to address high value estates. In some cases, establishing a trust or more than one might accomplish this.

There isn’t any reason why your loved ones or other heirs should have to wait until you are gone to start getting assets from you if you are worried about tax considerations. You can give annual gifts to individuals and charities up to a certain amount each year. The limit changes annually, so make sure you find out what this is so you don’t go over it.

Don’t neglect other issues

You also need to make sure that you have someone who can stand in your stead for financial and health care decisions if you can’t make those choices yourself. The individual or individuals you choose for these duties need to have the power of attorney for finances or for health care. You also need to establish a living will and possibly leave a letter of instruction to ensure that your wishes are conveyed.

Estate Planning - Braverman Law Group, LLC

Is it really possible to avoid probate?

Estate planning without children might be challenging