While most reasonably competent agents can guide a successful purchase, a stellar one will also counsel you on considerations to protect your asset. This includes home insurance, warranty plans, hazard insurance policies relevant to the specific location of your home, and estate planning. Protecting your property is as important as making the initial investment, and without a trust in place you put your property at risk of a lengthy and costly court probate process.
Did you know:
- A will is not sufficient to avoid probate
- Average duration of probate process is 9-15 months
- The costs of probate are substantial. It is not unusual for the entire cost to be above 5% of the value of your property, so a $500,000 asset could cost more than $25,000 in probate fees.
- Probate is public record
There are two probate options: Notice of Proposed Action and Court Confirmation, if agreement cannot be reached between the heirs, beneficiaries, or anyone with an interest in the estate, then a court order is required to move forward.
How to avoid probate
The best advice is to speak to a state licensed attorney with trust and probate experience. As mentioned above a will is not sufficient to avoid an estate going through the probate process. The two primary ways of avoiding probate are through establishing a trust or holding title as Joint Tenants. Deciding how to hold title on a property is a personal choice with pros and cons for each – I advise a comprehensive review of your estate with a qualified professional to decide how you would like things structured and distributed upon your death. Having these conversations are difficult for many, but proactive planning before health concerns arise, will ensure that your heirs receive what you intended, reduce the stress on family members, and avoid the costly hassle of probate.
Benefits of a Trust
It is a misconception that only the super wealthy need, or can benefit from, a trust. A trust is a comprehensive document that spells out the rules of how your estate is to be handled after your death. The upfront financial investment of establishing a trust is significantly less expensive than probate and attorney costs and fees. A basic trust can be done for as little as a few thousand dollars. A trust results in faster distribution to heirs without court oversight, names beneficiaries and a trustee, avoids probate, potentially minimizes estate tax liability, and confers privacy since it is not part of a public record.
Like most processes, advanced research and planning are worth their weight in gold. Don’t hesitate to reach out to a trust attorney to learn more about the best choice for your family. A modest investment today will pay dividends in the future.