While lawyers and judges are the ultimate legal experts, of course, I believe that every citizen should take the time to learn a little about law for several reasons. First, it is important to know your rights, and knowing them can come in handy if anyone ever accuses you of a crime you didn't commit or threatens you legally in another other way. Second, learning about your local, state, and federal laws can help you act as a better citizen. When election time comes around, you can then truly understand ever change in law being proposed by a candidate and whether it benefits society or not. I plan to share posts about law topics explained in plain English on my new blog, so you can come back often to sharpen your legal knowledge!
When most people consider estate planning, the first thing that comes to mind is a last will and testament. In all likelihood, nothing will ever replace the will as the premier estate instrument, but you should understand that you can do a better job of planning for your estate using methods that are far superior to a will. Read on to learn how simple and easy it can be to minimize a will and create a better estate plan.
A Revocable Trust
One of the many negative aspects of a will is the need to have it probated. While, if you have a will it must be probated, you can also add a revocable trust to your estate package that can effectively keep nearly all of your property out of probate. Probate means having a court process your will, which can take months and make your personal financial affairs public. A trust can be used immediately after the death and is entirely private. Using the trust, you can name beneficiaries and property, and name a person to be in charge of administering the trust after your death. It's important to note that any property specifically addressed in both will and the trust will be dealt with using the trust; the trust overrides the will.
Transfer On Death (TOD)
Nearly everyone has money in checking, savings and investment or retirement accounts nowadays, and you can expect the funds to be immediately "frozen" upon the death of the owner. With a transfer on death (also called a payable on death) provision, the funds can be released to a designated person or person as soon as they present the death certificate. A simple form, one for each account, is all that is needed. You can name several people on the TOD, and the contents of the account will be equally divided among all those named. With a TOD, there is no need to wait for probate to be complete, freeing up funds immediately.
You can go ahead and make changes in deeds that will allow your beneficiaries the ability to become immediate owners of any real estate you might have. There are several different ways to perform these changes (known as a quit claim in some locales). You might have a deed set up to give you complete ownership of the home until your death, known as a right of survivor-ship, or you may simply want to add your child's name to the present deed. Be aware that most states do have rules about spouses and their rights to real estate, however.
Learn more from Fitzpatrick, Skemp & Associates LLC.