Avoiding the Pain of Probate

Avoid Probate by using a Revocable Living Trust as your primary estate planning tool.

Many people have big misconceptions of how a Last Will and Testament works. They assume that if they have a Will, their heirs will not have to go to court and file a probate. Instead, for the person who only has a Will, we do have to file a probate with the court at death. That’s because a Will does not transfer a person’s assets to his or her heirs automatically – it only states who should receive those assets. I often tell clients a Will is just instructions to the court about what you want to happen and who should be in charge of your estate.

So, what is probate? Probate is the legal proceeding where we file your Will in court and ask the court to formally appoint your selected “executor.” Without that formal appointment, whoever you selected to wrap up your estate is unable to act.

Probate is time consuming and expensive for a personal representative (that’s the title for your executor in Arizona). It can be a long, drawn out procedure, requires continued communication with the court, and is public – anyone can go and ask for a copy of the Will or look at what’s going on in your estate.

The good news is that probate is avoidable with the right estate planning tools, and specifically with the Revocable Living Trust. Couples often own most of their property jointly, but on the death of the second spouse, the children or other heirs are faced with the settlement of the estate. The house and other real property needs to be sold or transferred, but before that can happen, the Probate Court gets involved.

Here is a list of some of the demands of probate:

1. Locate the original Will. If you can only find a copy, the procedure is going to be more prolonged and difficult.
2. Take the online training required of a personal representative.
3. File the paperwork to apply to the Court to be appointed as personal representative of the estate and give notice to the other heirs. There are 7 different documents that must be filed just to start the probate – and that’s for a simple “informal” probate. Most people hire an attorney rather than try to muddle through all of it themselves.
4. Obtain permission from the Court to pay a support allowance to the family and minor children (if needed).
5. Prepare an inventory and obtain appraisals of estate assets including brokerage and bank accounts, realty, mobile homes, automobiles and other vehicles, furniture, jewelry and other possessions.
6. Send a Notice to Creditors to creditors you know about and publish the Notice in a newspaper acceptable to the Court.
7. Review any claims filed and approve them; Oppose claims that are invalid or incorrect.
8. Petition the Court for approval to sell real property or perform other duties if necessary.
9. Prepare detailed final accounting which is acceptable to the Court, sending copies to the beneficiaries.
10. File the plan of distribution with the Court.
11. Prepare the Report of Final Distribution.
12. File documents with the Court to close the estate and request discharge of the personal representative.

If you own property in other states, a similar probate case must be filed in those other states as well. Other states, notably California, have very cumbersome and drawn out procedures for probate.

The Revocable Living Trust is valuable for many estate planning needs, but one of the most obvious is the avoidance of all the time and expense of probate. With a Trust, your assets are titled in your name as trustee rather than in your individual name as owner. While you are alive and competent, you control your financial affairs much the same as you do without a trust. You manage your assets, receive the income, pay bills, buy and sell property and so on.

However, when you can no longer manage your affairs (either when determined incompetent or at death), your successor trustee (someone you have already named in your Trust) automatically takes over. At your death, that trustee steps into your shoes as trustee and can settle your estate without going through the entire probate process and certainly with less money and time spent on attorneys.

A Revocable Living Trust is a gift to your heirs. Spending the money now to put the right plan in place will save them time, expense and heartache. Best of all, you give your heirs the peace of mind of simple estate administration and knowing that your wishes have been fulfilled. For more on the benefits and uses of the Revocable Living Trust, take advantage of my free consultation. Call our office at 602-375-6752, inquire through our website at https://libbybanks.com/schedule-estate-planning-meeting, or email my assistant Raegan at Admin@libbybanks.com.