we all have one thing in common: we will die. Well, there’s your happy news for the day! As I think about it, most of us have something else in common too: we have a person or people whom we love deeply who will be responsible for handling everything after our passing. While I know that nobody likes to think about the end of life, I also know that people want to make it as easy on their loved ones as possible. That’s really the perspective from which this is written. Make it easier on them by being prepared.
Some common misperceptions we hear as advisors:
Let me be clear about one thing; I AM NOT AN ATTORNEY. However, I can give you some general understanding of some of these points. Per my personal estate planning attorney, a will does not negate probate. In fact, if that’s all that you have, you are guaranteed to go through probate in the state of Arkansas.
So, how do you AVOID PROBATE?
While there is more to it than this, I like to think of the will as “who gets grandma’s china?” The revocable living trust, however, is intended to keep the estate out of probate. Our home is a great example of this. If my husband and I died in a joint car accident and our home were jointly owned by the two of us, who has the right to sell the house? Nobody! It would have to go through probate to determine who has the right to do anything with it.
Now, back to the concept of a trust. If the two of us died in a joint car accident and our home were owned by the trust, it would bypass probate. The reason is that our home, which is indeed owned by our trust, would pass to the successor trustees whom we have named in our trust. All they would need in terms of documentation is a death certificate and a copy of the trust; at that time, they could sell the house.
Why is this such a big deal? Imagine if there is still a mortgage in place on the home. The payments would still have to be made each month during probate, which is a minimum of 6 months in the state of Arkansas. We have seen young, adult children have to gather all the personal items and walk away from the home simply because they could not afford to keep up the payments during the time that the house was going through probate. Even if the home is paid for, there would still be taxes and insurance to be maintained.
Some other reasons to consider whether you need a trust:
Now, I will say that not everybody needs a trust. Leave it to your estate planning attorney to determine if you need any or all of the following: will, power of attorney, living will, and a trust.
One thing that you do need, regardless of your situation, is open communication with your spouse and your heirs. Be sure that your loved ones know all the following:
My mom-in-law recently passed away, and my husband and I are the family members responsible for settling everything. Even with what I do for a living and as prepared as we thought that we were, it has still taken well over 80 hours of work on my part alone to settle things. I cannot begin to imagine what it would be like if we had not been prepared.
Make it easy on your loved ones. BE PREPARED. By the way, do you know anybody who “died before their time?” Be prepared early.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.