Risks

Probate

Retirement planning isn’t just about what you intend to use during retirement; it’s also about who you want to inherit your wealth. Whether it’s your family, a beloved institution, or a philanthropic cause, a clear estate plan makes the probate process quick and easy, or, better yet, avoids it altogether.

Probate is the transfer of your assets to those you’ve designated them to, your beneficiaries. A probate court will look over your remaining assets and legalized will to ensure there are no claims or challenges against the estate or the validity of your will. If you don’t make a legalized plan for your estate,  you risk the possibility that your money goes somewhere it shouldn’t (like your ex-spouse inherits it all) or that your beneficiaries need to shoulder the burden of high probate fees, which can reach up to 7% of your estate value. The longer your estate remains in probate, the higher the fees, and the longer it takes for your assets to go to the people you love.

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Providing clear, authenticated directions for the distribution of your estate will reduce the chances that your plans are contested in probate court. Here are a few useful ways to mitigate the risks associated with the probate process, or to avoid them all together. Want help utilizing these ideas? Contact us.


See examples below of estate planning that we can help you with.

  • Write Your Will

    An authenticated will protects you from intestacy, or dying without a will. In the case of intestacy, the transfer of your property will fall to the state, who will assign an administrator to determine how your assets will be allocated, which can be expensive and time-consuming. It’s essential to have a legalized will prepared to ensure that your estate is managed as you intended.

  • Open a Trust

    Trusts are private and avoid the probate process entirely, so they’re ideal if you want to keep your financial information out of the public eye. If a trust seems like a good idea to you, hire a consultant to help you decide which type will accomplish your goals.

  • Update Beneficiary Information

    Make sure beneficiary information is up to date on all of your retirement accounts, like life insurance policies, 401(k)s, annuities, and IRAs. Assign transfer on death designations for your bank accounts so they can pass easily, without probate, to your beneficiaries.

  • Cash Accounts

    Donate to Charity

    You can give to a cause you love while reducing your tax burden. There are multiple ways to give, either by listing the charity as a beneficiary on your accounts, establishing a fund/foundation, or making a bequest.

TOP ADVICE:

Make sure to establish clear, authenticated directions for the distribution of your estate, and inform your beneficiaries so they know what to expect.

  • That depends. We’ve seen clients with less than $200,000 in assets that need trusts.

  • Yes, a will does not circumvent probate. If your will is clear, however, and is not contested, the probate process will be a lot quicker (and cheaper).

  • Normally, accounts with named beneficiaries will not enter probate, but will be distributed immediately to the listed beneficiaries. That’s why it’s so important to keep beneficiary information up-to-date.

  • Trusts aren’t just for the super-wealthy. The average cost to start one ranges from $1,000 to $7,000, depending on your assets. They’re particularly useful for those who have alternative investments, like real estate. If you’re wondering whether your estate could benefit from trust, meet with one of our seasoned consultants.

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