Legacy Assurance Plan: cost of probate

Monday, December 18, 2017

Choosing the Proper Form of Estate Planning for Your Home

Summary: For a lot of people, their home is their most important asset, both in terms of dollar value and emotional value. There are lots of different ways to structure your overall estate plan, and that is true regarding how you handle your home, too. Some methods may, depending on your circumstances, be more advantageous than others. Planning for your home can create traps for you if you’re not careful. Choose a disadvantageous plan and you could create major headaches for you or your loved ones. A proper plan, such as one with a revocable living trust, may allow you or your loved ones to maintain control and flexibility while also escaping unnecessary costs, procedural burdens and stress.

Avoiding probate may a very important goal within the process of planning for the transfer of your home. Probate can potentially be complicated, stressful, time-consuming and expensive. There may be many documents that have to be filed with the court and multiple hearings to attend. There is also the requirement that the house be professionally assessed to determine its exact value.

In a recent article, a representative of Fidelity Investments told the New York Times that, when “assets are left through a will, about 5 to 15 percent of the total value of the estate goes to pay probate and legal fees.” These figures do not even factor in the cost to whomever you’ve named as the personal representative of your estate. As one New York City estate planning attorney told the Times in that same recent article, “People take days off from work to head to probate, which costs time and money. Who likes spending their vacation days in probate?”

One way around this problem is the use of trust planning. If your needs and goals center primarily upon avoiding probate, then a revocable living trust may be a place to start. With a properly executed living trust that is properly funded, your estate won’t need to go through probate when you die. Not only will you avoid the possible costs and delays of probate, you’ll also avoid the other procedural costs, hurdles and headaches, such as a probate-mandated valuation assessment of your home. If you have a living trust and your home funded into it, you can still sell it, give it away, rent it out or do anything you would otherwise do to your home if it was in your own name. You’ll have all of the control, freedom and flexibility as if you owned the home in your own individual name, but your home will be protected in terms of avoiding probate.

If, however, your goals also involve other needs (such as Medicaid planning, for example) there may be different or additional estate planning tools available to help. Certain types of irrevocable trusts may allow you to reduce the size of your “countable” estate and increase your potential for qualifying for benefits. Transferring property into an irrevocable trust should be done carefully and after detailed consultation with an experienced estate planning attorney. As the name implies, these trusts are irrevocable, so you can’t change your mind later. Additionally, if your concern is Medicaid planning, it is important to note that certain assets may be exempt from your “countable” estate and may not need to be placed in a trust to enhance your overall Medicaid planning goals.

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.

This article written and published by:

Legacy Assurance Plan

8039 Cooper Creek Blvd

University Park, Florida 34201

844.306.5272 (Phone)

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Thursday, August 3, 2017

Your Living Trust | Protecting You Against More Than Just the Costs and Delays of Probate

Summary: Your living trust, if it is properly created and funded, can do many things for your family after you pass away. Your trust can help you avoid probate’s potentially high costs, long delays and public nature. Additionally, though, a well-crafted living trust may also provide a vital safeguard against possibly harmful court actions like unwanted conservatorship, guardianship or elder abuse actions launched by people who goals do not mesh with your own.

If you read or hear a discussion about the benefits of a revocable living trust, you may hear most of this discussion focusing on how probate can be expensive, can be time consuming and can create public exposure of your private matters, and how a proper living trust can help your family avoid all that. This is all definitely true and, depending on your circumstances, can be a huge factor in favor of obtaining an estate plan with a living trust. These discussions do not, however, tell the whole story. Your trust can offer other vital benefits, too. One of the biggest of these additional benefits relates to unwanted elder law actions. A lot of times these actions involve an unwanted conservatorship or guardianship. In one recent real-life case, though, the unwanted court action was a charge of elder abuse.

The senior in the case was 88-year-old Eileen. Eileen had taken action and obtained an estate plan that included a living trust. In fact, Eileen and her late husband set up various trusts. Over the years, Eileen, the husband and three of the couple’s four children served as trustees.

Then, in 2013, Eileen’s fourth child, Belinda, filed an elder abuse lawsuit against her three siblings. She claimed in her lawsuit that the siblings’ actions in managing the trusts were so badly out-of-line as to constitute financial abuse of a senior. The siblings asked the judge to dismiss the case.

Eileen did not sick back passively. She hired her own lawyer who joined the three siblings’ argument in favor dismissal. The siblings and Eileen all argued that the law did not give Belinda the legal right to pursue an elder abuse action on behalf of her mother. Eileen and the three children won the day in court, as the judge dismissed the case and the appeals court upheld that ruling.

Part of the reason that Belinda lost was because her mother had an estate plan in place that expressed her interests. Eileen’s trust was clear that Belinda was neither a trustee nor a beneficiary under the trust. These were some of the key facts in finding that Belinda lacked what the law calls “standing,” or a right to take legal action. The appeals court, in upholding the ruling against Belinda, stated that Eileen named Belinda as her agent under a valid power of attorney or named her as a trustee, then the motion seeking dismissal would have failed and Belinda could have gone forward with her suit. However, Belinda clearly was neither with Eileen’s plan, so Belinda’s suit failed.

Eileen had planned and her plan had made her intentions known. By making clear whom she wanted to be her beneficiaries and whom she wanted to act on her behalf (and whom she did not,) Eileen’s plan helped her defeat a legal action seeking to take an action on her behalf of which she did not approve. This is a clear example of an estate plan at work and how a living trust does more than just avoid probate administration after your death.