In our field, this dynamic applies to Loveland, OH probate avoidance, and we will share some insight in this post.
Probate is the legal process of estate administration. If you use a will to state your final wishes with regard to asset transfers, the executor that you name in the document would admit the will to probate.
The process serves a purpose, because the court makes sure that the will is valid, and interested parties have a chance to contest the terms during probate. Creditors are given time to come forward, and this is another reason the process exists.
In spite of the fact that the safeguards are only fair, the rightful inheritors pay a price quite literally. Loveland, OH probate expenses include a filing fee, the executor’s payment, possible legal and accounting expenses, and liquidation and appraisal charges.
It has been estimated that probate expenses will usually consume between three percent and seven percent of an estate that is subject to the process. There is also a loss of privacy, because probate records can be accessed by anyone that has an interest.
Many would say that the time consumption is the worst problem with probate. Depending on the jurisdiction, it will usually take a minimum of eight months to run its course, and no inheritances are distributed while the estate is being probated by the court.
Risky Probate Avoidance Ideas
Now that you understand why people try to avoid probate, we can get to the point of this post. There are some types of asset transfers that are not subject to probate, and people sometimes embrace one or more of them in an effort to find that elusive “simple solution.”
It is possible to change the paperwork on your home ownership documents to create a joint tenancy. If you take this step, you name someone to become a co-owner of the property.
After the death of one joint tenant, the surviving joint tenant would become the sole owner of the property (assuming there are just two joint tenants), and the probate court would not be involved.
This sounds great on the surface, but the newly added joint tenant would own half of the property immediately. As a result, if they are behind on their taxes, or if they are sued by creditors or an accident victim, their portion of the property would not be protected.
You can start payable on death accounts at banks and brokerages. A beneficiary would be added to the account, and they would inherit the assets after your passing. This would be a probate-free transfer.
This is a partial solution at best, and at worst, it can be a major mistake. Some people create one of these accounts and they name one person as the beneficiary. They tell this individual to distribute the assets among multiple others in a certain manner.
Sure, that’s simple enough, but will the beneficiary choose to follow these verbal instructions when the time comes? People sometimes allow greed to overcome them, and short of this, they may decide that the decedent was being unfair and make their own decisions.
Revocable Living Trust
The best way to facilitate asset transfers outside of probate in Loveland is through the utilization of a revocable living trust. As the name would indicate, you retain the right of revocation, so you can change your mind and dissolve the trust entirely at any time.
While you are living, you would be the trustee, so you would have total control of the assets. After your death, the successor trustee that you designate in the document would distribute assets to the beneficiaries outside of probate.
This is one benefit, and there are others. You can include spendthrift protections, and consolidation of ownership will streamline estate administration process.
Plus, you can account for incapacity when you have the living trust. You can name a disability trustee, and they would assume the role if you were to become unable to handle your own affairs at some point in time.
Schedule a Consultation Today!
We are here to help if you are ready to discuss your estate planning goals with a Loveland, OH probate lawyer. You can send us a message to request a consultation appointment, and we can be reached by phone at 513-721-1513.