Ideally, when someone passes away, the paperwork and material concerns associated with the deceased’s passing are so seamlessly handled (thanks to excellent preparation) that they fade into the background, allowing the family and other loved ones to grieve and remember the deceased in peace.
In fact, the whole business of estate planning—or at least a significant piece of it—is concerned with ease. How can money, property, and legacies be transferred to the next generation in a harmonious, stress-free, fair process? To that end, many people strive to avoid burdening their loved ones with the complications and costs involved with probate.
There are numerous tools of the trade that our Madison estate planning attorneys may use to keep your money and property out of probate, for example, establishing joint ownership on bank accounts and real estate titles, designating beneficiaries for life insurance policies and certain accounts, and so on. However, setting up a revocable living trust is quite often the best, most comprehensive option for avoiding probate. Let’s discuss why this is true.
What is a trust?
Often touted as an alternative to a will, a trust is a legal structure that owns your accounts and property or is named as the beneficiary of certain accounts and property (like a retirement account) and is managed by a trusted decision maker, also known as a trustee, on your and your beneficiaries’ behalf. A living trust is established while you are still alive, as opposed to being created upon your death. You can be the trustee for your own living trust until you are no longer able to manage your financial affairs, or you pass away, at which point your chosen backup trustee, also known as a successor trustee, steps up and assumes the responsibility for managing the trust on your or your beneficiaries’ behalf.
How does a trust help you avoid probate?
The purpose of probate is to transfer property ownership for all accounts and property that are owned in your sole name and that do not have a beneficiary, pay-on-death, or transfer-on-death designation when you pass away. A trust can bypass this process completely because your accounts and property are either transferred to the trust while you are alive, or the trust is named as the beneficiary at your death. Therefore, when you die, there is nothing that needs to be transferred by the probate court (everything is already in your trust or was transferred to the trust automatically at your death). Furthermore, a trust can cover virtually any type of account or property, from real estate to heirlooms to stock to bank accounts. When a trust is structured correctly with the help of our experienced estate planning attorneys, your affairs can stay out of probate court entirely. This process not only limits court costs but also maintains the privacy of your financial records while enabling your beneficiaries to enjoy the benefits of the trust without disruption or delay.
Establishing a trust can seem a bit complicated, and the process can cost a bit more initially than preparing a will. However, if you are willing to invest a little more up front, a trust can be your best option allowing your loved ones to avoid probate later.
We Can Help
The key to effective planning that minimizes the likelihood of a drawn-out, contentious, expensive process is to work with highly qualified, trusted people. Our Madison estate planning attorneys genuinely care about you and your loved ones and know how to forge the right strategy for all of you. We invite you to call us at (608) 447-0006 or complete this contact form on our website to learn more about next steps for achieving the peace of mind you deserve.
