If you have a younger sibling(s), then you’ll remember building something – a model, a card house, something with Lego blocks – and then have your sibling, or cousin, or niece, destroy it. Do you remember that feeling? Now imagine having spent your life building, growing, creating, developing your estate, and then having it ripped to shreds the moment you are unable to do anything about it or rebuild any of it. That would be terrible. That is what happens when you die without a well thought out and properly executed estate plan. Those who think, “What difference does it make? You’re dead,” haven’t built much and this blog isn’t for them. For the rest of us, we’ll want an estate plan.
An estate plan is defined as “the process of planning for the orderly administration and disposition of property after the owner dies.” It is not just distribution. That’s just giving away your stuff. That’s a will; a small, but important part of estate planning. We’re more interested in the “orderly administration” bit. That’s how you maintain control of your assets so that they continue to work for the things that are important to you and your family.
The estate plan is just that, your plan. The final legal execution of that plan is called probate. Probate is “the legal process that wraps up a person’s legal and financial affairs after their death. During the probate process a person’s property is identified, cataloged, and appraised. In addition, probate makes certain any outstanding debts and taxes are paid. It can be a complex process, filled with very specific legal requirements.” Without a legally binding, written plan, a judge will decide what happens with your assets. With a proper plan, probate is the legal process of fulfilling your wishes. Either way, it’s a public process and potentially a long, tedious pain in the ass. Some assets can be structured so they may not have to go through probate. Here’s a partial list:
Property held in a trust
Jointly held property (but not common property)
Death benefits from insurance policies (unless payable to the estate)
Property given away before you die
Assets in a pay-on-death account
Retirement accounts with a named beneficiary
You will definitely want to consult professional help for this. You want a tight, we’ll written plan to make its execution as easy as possible. The harder the process is, the more it will cost and the faster your executor will lose interest in helping to get it done. Remember, you’re dead. You’ll need help with this. Don’t make it hard.
William S Jiggetts