Don’t let your life savings be diminished by the high cost of probate or destroyed from ever increasing long term care expenses.
We can help protect your legacy.
We handle a great deal of probate cases at my office. In fact, if someone has passed away in your family, we can probably help you. However, whenever I work on these cases I often wonder why so many people allow their assets to go through probate. Did they not know there were other choices? Did they not know how expensive probate can be? I am also often saddened when I see a person’s Will that leaves the assets equally to all the children, but the assets pass outside of the Will and do not follow the person’s wishes. Below I will address some of the common misconceptions many people have.
False Belief #1: I have a Will so my assets will avoid probate.
Truth: If an asset passes through the Will, the assets shall go through probate. You should think of your Will as a fancy letter to the probate judge giving instructions to the judge on who you want the court to appoint to be in charge (your executor) and who you want your assets to go to once the debts are paid.
False Belief #2: My Will controls where all my assets pass upon my death.
Truth: Your Will only controls those assets in your name at death where you have not named a beneficiary or where there is no surviving co-owner who has survivorship rights. If you put a child on an account or on real estate, it is generally as a joint owner with survivorship rights. This means even though your Will says your assets are to be divided equally between your children, this isn’t what happens. Instead your bank account or real estate that you have added a child to will pass to that child only. Additionally by adding your child to your accounts or real estate, you have no potentially made your assets part of your child’s divorce case. You have also put your assets at risk if a child gets in a car wreck and gets sued. In addition, when you add a child to real estate, you have made a gift for Medicaid purposes and caused unintended tax consequences through the partial loss of a stepped up tax basis upon death.
Other false beliefs I often encounter:
- My IRA/401k isn’t counted as assets by Medicaid (these assets are counted.)
- I have a trust and therefore my assets are protected from the nursing home (if you have the ability to take assets out of the trust as you desire, then the trust does not protect your assets)
Going through probate is expensive and generally not necessary. A house and assets worth $600,000 going through probate can create probate fees of approx. $30,000. In order to avoid probate while maintaining a plan that gets your assets where you truly want them to go without risking your assets to your child’s creditors or to divorce proceedings or to unexpected tax consequences takes a bit of planning. However, this planning doesn’t have to be complicated.
Please call us to schedule a consultation to discuss ways to avoid probate. If you want to go further than just avoiding probate, we can also discuss ways to protect your assets from the high cost of long term care. Call now for your appointment at 301 663 9230.