The last will is the most commonly utilized asset transfer vehicle in estate planning. Many individuals assume that this is their only logical option because they are under the impression that trusts only serve the interests of the very wealthy.
In fact, this is not true at all. There are indeed trusts that are created to serve the interests of high net worth individuals. However, some trusts, such as revocable living trusts, don't provide the asset protection and estate tax efficiency that many wealthy people would be seeking.
Revocable living trusts enable asset transfers outside of the probate process. This is the primary reason why people create them.
Probate is a time-consuming process that comes along with some considerable expenses. With a living trust you may save your heirs a considerable amount of time as you avoid probate expenses.
Another one of the pitfalls of probate is the fact that you and your family's personal matters are no longer private. The probate court will be supervising the administration of the estate, and the things that go on are a matter of public record. Anyone could access the probate court records to probe into the business that was conducted during probate.
For various reasons many people would prefer that their final affairs remain private and confidential.
If you'd like to learn more about the value of revocable living trusts we invite you to download our free report on the subject. You can gain access by clicking this link: Free Nevada Living Trust Report.
When you start to look into the subject of estate planning you see a lot written about employing strategies that are intended to help you avoid probate. Unless you are in the field you may not know exactly what probate is and why you might want to avoid it, an explanation may be in order.
Probate is the legal process that the typical estate has to pass through, and it is supervised by the probate court. The court must determine the validity of the will, and it is the venue within which any claims against the estate are heard. So if you wanted to contest a will or attempt to collect a debt owed to you by the deceased, you would do so in probate court.
There are two primary reasons why some people would prefer to avoid the process of probate. One of them is that it is expensive and it can reduce the value of your estate by anywhere from 2-7% depending on the specifics of your situation. There is a fee that must be paid to the court itself, and the personal representative of the estate is going to have to retain a probate lawyer, who will of course charge a fee. In fact, the personal representative is entitled to a fee as well, and he or she may have to bring in an accountant to assist with tax matters and an appraiser of assets as well as an estate liquidation company. All of this adds up.
Aside from the expense involved in the probate process, it is also time consuming. Depending on the size and scope of your estate and whether or not any aspect of the will is contested, it can take anywhere from six months to multiple years for the process of probate to run its course.
As you can see, there are some significant pitfalls that go along with the probate process, and this is why so many people are interested in doing whatever may be possible to avoid it.