Probate is a legal process that can be initiated when an estate is being administered. In Texas, a small estate can avoid probate through the use of a simple affidavit or a simplified probate procedure. Independent administration is another alternative to the full probate process.
When an estate is going through the actual probate procedure, there are some drawbacks that negatively impact the rightful heirs to the estate. We will look at some of them in this post, and we will explain the most widely embraced probate avoidance tool.
Time and Money
Most people would say that time and money are two of the most valuable commodities that we have, and we endeavor to use them wisely.
Inheritors do not receive their inheritances while an estate is being probated, and this is a time-consuming process. It will usually take about six months for the court to probate an estate, and it is not entirely uncommon for the process to drag on for longer periods of time.
No one wants to wait for their inheritance, so this is definitely a negative. When it comes to money, there are various different expenses that accumulate. The money that is spent during probate is coming out of the pockets of the heirs.
Loss of Privacy
Privacy is probably a priority when it comes to your financial decisions. When an estate passes through probate, the general public can access the records to find out how the assets were distributed.
This is less than ideal in a general sense, because anyone and everyone pry into your final affairs. Plus, the information can potentially cause hard feelings among interested parties.
Revocable Living Trust
These are the primary reasons why people try to avoid probate, and the solution that is ideal for the widest range of people is the revocable living trust. As the name would indicate, you can revoke or rescind the trust at any time, so there is no loss of control of the assets.
The right of revocation is not the only way that you control the resources. While you are living, you would act as the trustee, so you would have complete access to the assets every step of the way, even if you do not dissolve the trust.
When you draw up the trust declaration, you name a trustee to succeed you after you pass away. Unfortunately, many people become incapacitated late in their lives, and you can give the successor trustee the ability to step into the role in the event of your incapacity.
Obviously, your heirs would be the beneficiaries of the trust. After your death, the trustee would distribute the assets to the beneficiaries in accordance with the terms that you set forth in the trust declaration. The probate process would never enter the picture.
We should point out the fact that the probate court would be involved to some extent even if you could use one of the shortcuts that we looked at in the opening. A living trust would eliminate the legal hurdles.
With regard to the terms, you can include spendthrift protections, and this is another benefit. The trust would become irrevocable after your passing, and you could instruct the trustee to distribute limited assets on an incremental basis to prevent reckless spending.
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A living trust can be the right choice for a wide range of people, but it is just one of the tools in the estate planning toolkit. There are other types of trusts that can satisfy certain specific objectives, and you should understand your options so you can make fully informed decisions.
When you work with our firm, we will put you at ease and gain an understanding of your situation. After we become apprised of your goals, we will make recommendations and help you create a custom crafted plan that is ideal for you and your family.
You can schedule a consultation appointment right now if you give us a call at 512-258-9455, and you can use our contact form if you would prefer to send us a message.