Trusts and More and How To Avoid Probate

Probate is the term for the legal process in which a will is reviewed to determine whether it’s valid and authentic. Probate also refers to the general administering of a deceased person’s will (testate) or the estate of a deceased person without a will (intestate).

After an asset holder dies, the court appoints either an executor named in the will or an administrator if there’s no will to administer the process of probate. This involves collecting the assets of a deceased person to pay any liabilities remaining on the person’s estate and to distribute the assets to beneficiaries.

A deceased person who has provided a will is known as a testator. When the testator dies, the executor is responsible for initiating the probate process — filing the will with the probate court and paying off any taxes and debts owed from the estate. After an inventory has been taken, the value of assets has been calculated and debts have been paid off, the executor seeks authorization from the court to distribute whatever is left to the beneficiaries.

Don’t let the probate process of settling your estate cost your loved one’s money or get in the way of carrying out your estate plan.

• Your will must be legitimized by the local probate court. In Connecticut a will or codicil shall not be valid unless it is in writing, subscribed by the testator and attested by two witnesses, each of them subscribing in the testator’s presence. It is important to note that any will be executed according to the laws of the state or country where it was executed may be admitted to probate in this state and shall be effectual to pass any property of the testator situated in this state. C.G.S. 45a-251
• The judge needs to know this document is the last will of the deceased, review the inventory of the estate and confirm who will administer the estate proceeds. This is called executing a will.
• The executor or a lawyer representing the executor files the appropriate forms and handles court matters.

A will is not legal until it’s probated, and it can take anywhere from 6 months to 3 years. This allows an heir to challenge a current will, the probate court to confirm there are no errors in the documentation, and creditors to make claims against the estate. Creditors have 150 days to file a claim against an estate going through probate.

All assets must be accounted for — not just the house, car and bank accounts but also savings bonds, stock certificates and any personal property. Assets jointly owned or pay on death or transfer on death accounts with at least one designated beneficiary will avoid the probate process.

Probate can be relatively easy to avoid, yet many people fail to take steps to do that when planning their estates. Ensuring that you do not own any assets in your sole name or creating a living trust, also called a revocable trust, are some ways to avoid probate.

Add a joint owner. You can do this to a bank or investment account or to a real estate deed, which also will avoid probate if it’s clear that the account is owned as joint tenants with rights of survivorship and not as tenants in common.

Use of beneficiary designations on life insurance, bank and nonretirement investment accounts are referred to as payable on death or POD accounts. Several states allow you to designate beneficiaries for your real estate via transfer on death deeds, beneficiary deeds or affidavits

Create a living trust, (revocable trust.) This is a legal entity created to pass all your assets to. Property is retitled in the name of a Trustee on behalf of the trust. When the settlor passes away, there are no probate assets because the decedent does not own them in his or her name. Even if property or additional assets are acquired after creating a trust, a Pour Over Will can ensure the assets become part of the trust.

What works for you will depend on your family dynamics and your financial situation. Creating peace of mind for you and your loved ones is priceless. Minimizing costs associated with probate will help. Call us to discuss trusts and other ways to minimize or eliminate the pain of probate.