We are all tempted to avoid planning sometimes. Perhaps we would rather watch that football game. Or, perhaps we just do not want to think of our own mortality.
First, let’s look at what happens if you do nothing. If you do not have a revocable trust, your assets would be in your name, rather than the name of a revocable trust. As a result, your assets would be subject to a court process called “probate.” Probate is the process of gathering assets that are titled in the name of the deceased, making sure all creditors have been paid from those assets, determining who the new owner should be, and changing title from the deceased to the new owner.
In most states, the probate process can be rather tedious. According to a national survey, the average probate fee is around 2-3% of assets. The percentage of assets paid in fees is even higher if the estate is modest.
If the deceased did not even have a Will, any assets left after payment of claims and expenses would go according to a list of priorities or “intestate succession” enacted by the state government. Typically, the assets go to your spouse, your children, your parents, and then your siblings and other relatives. For a few people, it gives the assets as they would have wanted. However, for most people, they would prefer their assets to go somewhat differently. Perhaps they want all their assets to go to their spouse. Perhaps they want to leave some money for their parents to use for their care during their lifetimes. Perhaps a few gifts of a specific dollar amount would be desired. If you do not leave at least a Will, you will be stuck with what the state government has decided for you!
In a few states, a Will can be as simple as writing out what you want to happen, entirely in your own handwriting, and then sign it and date it. However, most states require that the deceased’s signature on the Will be witnessed by at least two witnesses. Of course, a Will is essential if you want to override the state’s slate of intestate succession.
With minimal hassle, you can have a Will which lets you decide where assets go. With little more hassle, you can have a revocable trust which avoids probate and provides flexibility during your lifetime, especially if you become incapacitated.
An estate planning attorney can help you with basic estate planning with minimal hassle. Of course, he or she can also help you with more advanced planning, as well.
Compliments of the McGee Law Firm, Attorney Brandon McGee
Written By: The American Academy of Estate Planning Attorneys
- Complete Asset List is the Starting Point - January 26, 2023
- What is a Lady Bird Deed? - January 25, 2023
- Don’t Be a Turkey – Take Advantage of Your Annual Per Donee Exclusion Amount - January 24, 2023
