No one likes thinking about their death. But the only thing worse than your death is leaving behind a complicated legal mess for your family. As a responsible real estate investor, you should commit to estate planning to avoid probate court; and the headache probate brings.
This article doesn't cover all the myriad aspects of estate planning.
Instead, I'll show you a strategy that works—an approach that enables you and your family to avoid probate and protect your assets.
This article will delve into the definition of probate, how to avoid it, and describe a living trust and its advantages in estate planning.
What Is Probate?
Probate is the legal process governed by state law, in which a court evaluates a will. If the will is valid, then the court splits the deceased person's assets according to the terms of the will.
Probate is not a simple process. It's time-consuming, expensive, and can get incredibly messy for those involved. Like vultures, people suddenly want to snatch a piece of your assets for themselves once you're gone.
If you don't have a will or a power of attorney, the government decides how to split your assets after you die. Even if you do have a will, you can't avoid probate. Your grieving family will have to go through a court proceeding where:
- Assets become part of the public record
- Bills are paid
- Family's fight for assets
- Lawsuits emerge from the woodwork
Your assets get snarled in the tangled mess of court proceedings. Those court dates and lawyer fees eat up even more of your estate. Ultimately, if you want to leave your family in the best financial position, it's better to avoid probate altogether.
How Do I Avoid Probate?
You avoid probate through clever estate planning and using a living trust. A living trust provides you ultimate privacy and control in the event of your untimely demise.
Think of a living trust as your corporate shield that sits atop your estate planning structure. Here's how it works–the trust document holds all your assets including, but not limited to:
- Bank accounts
- Stock accounts
The living trust is at the top of the structure, and it owns the LLC(s). The LLC(s) own all your assets and provides a convenient, anonymous, and lawsuit-resistant way to hold your assets when you're alive.
Dying is scary, and thinking about your death is an existential crisis that no one wants to experience. To achieve peace of mind, consider a living trust as an investment in your family's future.
What Is a Living Trust?
A living trust is a legal strategy that enables you to avoid probate. A living trust is a legal protection mechanism for your property and investments. You create a trust agreement, and that trust takes control of your properties and assets.
You designate a trustee to control the assets. In virtually all scenarios, the trustee is the person funding the trust (you).
Why should you do this? Simple, a living trust completely negates the stickiness of probate court proceedings.
How Does a Living Trust Help Me Avoid Probate?
An enormously valuable benefit of the living trust is the ability for you to name the beneficiaries of your assets when you die. That benefit helps your heirs avoid probate.
Also–when you kick the bucket–your living trust still controls your assets. The trust is the legal vehicle you will use to pass your assets on to your heirs. Your assets stay within the structure, and the living trust and LLC prevent your assets from entering probate.
Your living trust enables your family or heirs to:
- Access your properties
- Collect rents
- Pay Mortgages
Since your assets are still anonymous, your heirs and beneficiaries are lawsuit-resistant. They can enjoy the assets immediately upon the transfer.
You can support your living trust with a will that directs your trustee to place anything not in the living trust into the trust so that it can distribute the assets. These are things like:
- Personal vehicles
With the combination of a living trust, LLCs, and careful estate planning, you can enable your family to avoid probate and its expensive obstacles. Remember, you won't be there to protect them, so you should make their grieving process as clean and organized as possible.
To avoid probate, create a living trust. Probate courts can result in unnecessary hardship while eating up your assets. Those assets don't belong to the government or lawyers but to your heirs and beneficiaries.
An estate planning strategy prevents your family from having to make tough decisions after you die. A living trust gives you the control and privacy that you need to keep providing for your family once you shed loose this mortal coil.
Are you ready to take control of your financial future and ensure your family is taken care of when you die? Check out our FREE Estate Planning Masterclass and Estate Planning: Know More than Your Attorney in 15 Minutes.