Many people mistakenly think that they do not need a last will and testament. Most feel that they either do not have enough assets to warrant having a will, or they mistakenly believe that the state will dispose of what little assets they have in a prudent manner. While states try to act in a consistent manner when distributing assets from estates without a will, it does not mean that they will do it exactly as you would have wished. There are also expenses and time delays to consider as well. This is where estate planning in Scottsdale can make a difference.
Going To Probate Is Expensive
If you die without a will and your estate has to go to probate, the process can be lengthy and costly to your heirs. Probate court can eat up as much as 20% of your total estate. When your estate enters probate there are many lawyer fees, appraisals, and court costs that will have to be paid to settle your estate. All of these costs come out of the assets that your estate owns. That means that there will simply be less assets to pass down to your heirs as a result of all the fees that you will have to pay in probate court because you did not have a will or designate the proper beneficiaries to assets such as Roth IRAs, life insurance policies, and other retirement plans that could skip probate and save your heirs time and money.
Sending Your Estate To Probate Takes A Long Time
It can take several months for your assets to pass through probate court if you do not have a will or designate the proper beneficiaries for your assets. What if your family needs money immediately to live off of or even to bury you? How will they pay those costs if your estate is tied up in probate court? It is essential that you have a valid will and that you have properly designated beneficiaries for things such as any life insurance policies and investments. These assets are considered contractual obligations between you and the insurance or investment company. Those companies will complete the contract sending your assets to your heirs after your death if the forms are completed properly which can provide your family with much needed money immediately after your death. Not making these preparations can prove costly and delay the help your family needs during a trying time.
Everyone Should Have A Will to Help with Estate Planning
Most people think that they do not need a will if they have very little assets in their name. The truth of the matter is that everyone needs a will. It is one of the foundation blocks of everyone’s estate plan and a tool that everyone needs to have. A will can help you bypass the probate courts as well as help you designate guardians for your children. Wills can help ensure that your final wishes are carried out exactly as you would have liked for them to be handled. Not all states pass down assets the same way as you would have wished for them to be sent to your heirs. The only way to ensure that your wishes are followed exactly as you would have wanted them is to have a last will and testament.
Adding A Trust Can Help You Avoid Probate
Trusts are also a great tool to add to your estate plan. A trust can own real estate, insurance policies, and other assets in the trust’s name instead of yours. Holding assets in a trust can help your estate avoid probate court after you die, and it can also help to try and shield some of your assets from creditors. Also, if you have a very large estate, a trust can help you minimize the amount of estate tax that you will have to pay and can make it very efficient in passing assets to your heirs.
In most cases, you should try to avoid the cost and delay of probate court. Having a last will and testament, a trust, and updating your beneficiary documents are the only ways that will speed assets to your heir at the direction that you would like. If you want to have the most amount of guarantee that your final wishes will be carried out like you wanted, you need these documents.
Tom Fischer is a specialist in Estate Planning, Scottsdale, Arizona, However he is not an attorney and does not render legal or tax advice. This article is purley educational. You should consult your accoutant or lawyer for your specific situation and actual legal documents.