When it comes to estate planning, every detail matters.
Each estate plan is full of nuances that can have an immense impact on your family and loved ones. Probate essentially authenticates your will and ensures that everything goes to the right people. In many cases, it’s possible to avoid probate by introducing the right estate documents, asset titling, and beneficiary designations to pass on your estate to your beneficiaries.
Probate functions differently in each state and in some cases it can even be a slightly different experience from county to county. Since probate can be costly, lengthy, and reduce your family’s privacy, many people prefer to avoid the probate process if possible.
What is probate?
Probate refers to the court-supervised process of managing your estate after your death. This includes authenticating your will, appointing your executor, paying any outstanding bills and taxes, and determining and distributing your assets to beneficiaries.
Probate laws are different in every state, and not every estate is required to undergo probate, depending on the status of your will, asset titling, and the value of your assets.
Three reasons you might want to avoid probate
Probate in and of itself isn’t necessarily a bad thing. That said, there are several reasons why individuals might want to avoid probate, including cost, time, and privacy.
Probate can be costly
One of the main reasons why individuals might want to avoid probate is that the process can be costly. You’ll need to cover the relevant costs for lawyers and legal processes during probate, and families might not have the funds to cover these expenses. The cost of probate can also eat into your beneficiaries’ total inheritance. Probate costs in South Carolina are .25% of the value of probate assets so it is not a very expensive process.
Probate takes time
Probate processes are often lengthy, which can add time to an already stressful situation. Avoiding probate can mean that your estate can pass on to your beneficiaries in a shorter, more streamlined fashion. Probate in South Carolina can last approximately 9 months but it can be longer.
Probate reduces privacy
Probate is a matter of public record, which means that your family’s estate is made public. Many families may prefer to avoid the probate process to retain as much privacy as possible.
Can you structure your estate to side-step probate?
To avoid probate, it’s critical to work with an estate planning attorney who can help to ensure that your estate is in order in the event of your passing. Estate planning is a crucial part of any comprehensive financial plan and can help you to make sure that your estate is managed and distributed according to your wishes.
Because probate must interpret your will, it is imperative to make your will as clear, thorough, and current as possible. You should also be sure that your beneficiaries are accurate and up to date. It’s also critical to properly title assets and property to iron out wrinkles in the transition process.
Finally, making use of trusts like revocable living trusts can help you to avoid probate and effectively control the transfer of wealth to beneficiaries. In essence, living trusts allow you to place assets into a trust, which can then be managed by a trustee such as a relative, bank, or trust company. Revocable living trusts can be changed over time, and you’ll still retain control over your assets.
Build an intentional estate plan
Estate and legacy planning are critical to your long-term retirement strategy. It’s important to be intentional about where your assets go to protect your legacy and provide for your family and loved ones. Making proactive decisions regarding your estate means that the courts and your family aren’t left to decide what happens to your assets during an already stressful time.
Whether you’re just approaching retirement or well into your golden years, proper estate planning is an important component of your overall financial health. During the estate planning process, we review all relevant estate planning documents, including wills, trusts, durable powers of attorney, healthcare powers of attorney, and memorandums of instruction. Then we help you meet with an attorney to draw up the estate documents appropriate for your situation.
If you have questions about retirement and estate planning, we’d love to hear from you. Contact us or give us a call to learn more!