There are some misconceptions that are circulated about certain aspects of the estate planning process. One of them revolves around the simple will and the probate process, and we will provide some clarity here.
If you die without a will or a trust to direct asset transfers, the condition of intestacy will be the result. Under these circumstances, the probate court would provide supervision during the estate administration process.
They would designate a personal representative to act as the administrator. This is a role that would be assumed by an executor if a will had been utilized.
During probate, and creditors would be notified and they would be given time to come forward seeking payment. The personal representative would establish an estate bank account, and they would identify, inventory, and secure the assets.
After the debts are paid and the assets have prepared for distribution, the court will allow for distribution of the resources under the intestate succession laws of California.
Generally speaking, the closest relative or relatives would inherit the estate, but there is a clearly defined hierarchy. You can dig into the details if you read the relevant section in the California Probate Code.
Because of the fact that the probate court is involved when someone dies without a will, there are those that assume probate will not be necessary if you have a will. In fact, this is not the case at all.
The executor that is named in the document would admit will to probate, and the court would supervise during the administration process. For the most part, the responsibilities would be the same, but the assets would ultimately be distributed in accordance with the wishes of the testator.
There are some reasons why you may want to implement a probate avoidance strategy when you are planning your estate. Probate will usually take about eight or nine months to run its course at minimum, and the inheritors receive nothing during this interim.
Complicated cases can be stalled in probate for considerably longer periods of time. For example, the Marshall vs. Marshall case involving Anna Nicole Smith was hung up in court for more than a decade.
A slew of different expenses will accumulate during the probate process. The executor is entitled to remuneration, and there is a court filing fee. In many instances, the executor will bring in a probate lawyer and a tax accountant, so there are professional fees as well.
Appraisals and liquidation expenses will add to the debit side of the ledger, and all the expenses can consume a noticeable portion of the estate before it is transferred to the heirs.
The third major drawback is a loss of privacy. Interested parties can access probate records because it is a public proceeding, and this information can trigger emotional reactions.
You can make sure that your estate does not go through probate if you take the right steps in advance. The revocable living trust is a very effective probate avoidance tool, and there are other benefits.
A lot of people assume that you lose control of assets that you convey into any type of trust, but this does not apply to a revocable living trust. As the name would indicate, you would retain the right revocation, and you would act as the trustee while you are alive.
After your passing, the trustee that you named to succeed you would distribute assets to the beneficiaries outside of probate.
Another benefit is the ability to include spendthrift protections. The beneficiaries would not be able to access the principal, and this would also apply to their creditors. You can instruct the trustee to provide modest incremental distributions to prevent lavish, irresponsible spending.
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If you are ready to work with a Los Angeles estate planning attorney to put a plan in place, we are here to help. There are different approaches that can be taken, and we can gain an understanding of your objectives and implement a plan that is ideal for you and your family.
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