FAQ for Estate Planning Kansas City
I have a will. Why would I want a living trust?
Contrary to what you’ve probably heard, a will may not be the best plan for you and your family. That’s primarily because a will does not avoid probate when you die. A will must be validated by the probate court before it can be enforced.
Also, because a will can only go into effect after you die, it provides no project if you become physically or mentally incapacitated. So the court could easily take control of your assets before you die – a concern of millions of older Americans and their families.
Fortunately, there is a simple and proved alternative to a will – the revocable living trust. It avoids probate and lets you keep control of your assets while you are living – even if you become incapacitated – and after you die.
How does a living trust avoid probate and prevent court control of assets at incapacity?
When you set up a living trust, you transfer assets from your name to the name of your trust, which you control – such as from “Bob and Sue Smith, husband and wife” to “Bob and Sue Smith, trustees under trust dated mo/day/yr.”
Legally you no longer own anything; everything now belongs to your trust. So there is nothing for the courts to control when you die or become incapacitated. The concept is simple, but this is what keeps you and your family out of the courts.
Do I lose control of the assets in my trusts?
Absolutely not. You keep full control. As trustee of your trust, you can do anything you could do before – buy and sell assets, change or even cancel your trust. That’s why it’s called a revocable living trust. You even file the same tax returns. Nothing changes but the names on the titles.
If something happens to me, who has control?
If you and your spouse are co-trustees, either can act and have instant control if one becomes incapacitated or dies. If something happens to both of you, or if you are not the only trustee, the successor trustee you personally selected will step in. If a corporate trustee is already your trustee or co-trustee, they will continue to manage your trust for you.
What’s so bad about probate?
It can be expensive. Legal fees, executor fees and other costs must be paid before your assets can be fully distributed to your heirs. If you own property in other states, your family could face multiple probates, each one according to the laws in the state. These costs can vary widely; it would be a good idea to find out what they are now.
It takes time, usually nine months to two years, but often longer. During part of this time, assets are usually frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor approval. If your family needs money to live on, they must request a living allowance, which may be denied.
Your family has no privacy. Probate is a public process, so any “interested party” can see what you owned, whom you owed, who will receive your assets and when they will receive them. The process “invites” disgruntled heirs to contest your will and can expose your family to unscrupulous solicitors.
Your family has no control. The court process determines how much it will cost, how long will it take, and what information is made public.
How much does probate cost? How long does it take?
The cost and duration of probate can vary substantially depending on a number of factors such as the value and complexity of the estate, the existence of a Will and the location of real property owned by the estate. Will contests or disputes with alleged creditors over the debts of the estate can also add significant cost and delay. Common expenses of an estate include executors fees, attorneys fees, accounting fees, court fees, appraisal costs, and surety bonds. These typically add up to 2% to 7% of the total estate value. Most estates are settled though probate in about 9 to 18 months, assuming there is no litigation involved.
Does probate administer all assets of the decedent?
Probate is primarily a process through which title is transferred from the name of the deceased to the names of the beneficiaries.
Certain types of assets are what is called “non-probate assets” do not go through probate. These include:
- Property in which you own title as “joint tenants with right of survivorship”. Such property passes to the co-owners by operation of law and do not go through probate.
- Retirement accounts such as IRA and 401(k) accounts where there are designated beneficiaries.
- Life insurance policies.
- Bank accounts with “pay on death” (POD) designations or “in trust for” designations.
Property owned by a living trust. Legal title to such property passes to successor trustees without having to go through probate.
Request an Appointment
Message Sent. Thank you for contacting us. We will be in touch with you shortly.
|Mon - Fri:||9:00am - 5:00pm|
- Member Of The National Academy Of Elder Law Attorneys
- National Academy Of Elder Law Attorneys, Inc.
- U.S. Department Of Veterans Affairs
- Accredited Attorney With The Department Of Veterans Affairs