As we say in our Trusts & Beyond Seminars, “If you have a will, it means YOU WILL GO TO PROBATE!”
What is probate? It’s the court’s involvement in the re-registration of assets from one person to the next. The drawbacks are significant, and can entail abundant costs, lengthy delays in transferring assets to beneficiaries, lack of privacy (generally, anyone can obtain your will’s information—as well as who the beneficiaries are and the amounts received — since it becomes a matter of public record), and lack of control (statutes govern much of what a personal representative for your will can do—which usually results in a time consuming nightmare. For instance, if a stock needs to be sold quickly and permission from the courts is needed, or if a disgruntled family member challenges the will and the court has to provide a temporary administer while they come to a conclusion).
If you have no instructions on hand, it’s called dying “intestate”, and the State will still take your estate through Probate. Each state has their own rules about distributions for property and assets, known as intestate succession laws that dictate how your estate will be handled in probate court.
Probate is unnecessary! To avoid it, get a properly designed trust created and fund it appropriately, or obtain Payable on Death (POD) account registrations at banks and Transfer on Death (TOD) account registrations with the financial institutions that hold the assets that you wish to pass on.
Keep in mind that qualified assets (retirement accounts), annuities and life insurance all bypass probate on their own naturally.
Make sure that you understand your Institution’s rules regarding the assets and accounts they hold for you. As always—take the time to research and seek advice from a regulated, financial advisor licensed with FINRA (the Financial Industry Regulatory Authority). Please bypass the self-titled “professionals” that do not understand your investment and asset composition, or the rules and regulations of the institutions that you have been working with. You will save yourself a headache in the long run!