15
May
As summer draws nearer, our thoughts will invariably gravitate toward vacation time. Some people are fortunate enough to have second homes out of state that they can enjoy during the warmer months, and this is a beautiful thing.
You have a chance to unwind, spend quality time with your family and friends, and enjoy outdoor activities. However, from an estate planning perspective, if you are using a will as your asset transfer method, you should be aware of ancillary probate.
Estate Administration
Some people think that the executor you name in a will can act independently. The idea is that there’s a “reading of the will,” and after the contents are revealed, the distributions start flowing.
In reality, there is a major roadblock to get past before the property gets into the hands of the beneficiaries. After the testator’s death, the executor admits the will to probate. This is a court-supervised process, and it comes with some drawbacks.
Probate Pitfalls
First, there is the expense factor. The executor is paid, and there are legal fees, accounting charges, court costs, liquidation and appraisal expenses, etc. These expenditures reduce the estate’s value before it is distributed to the heirs.
Secondly, there is a loss of privacy. Interested parties can obtain the records because probate is a public proceeding. This readily available information can potentially cause problems.
Lastly, the inheritors are forced to play a waiting game. No bequests are distributed while the estate is in probate, and this will typically take about nine months minimum.
Ancillary Probate
Now that we have set the stage appropriately, we can drill down to the specific point of this post. As you can see from the above, probate is somewhat of a hassle for the heirs to an estate. How about more than one process?
Let’s say that you are a South Carolinian and you own a vacation home in Florida. If you are using a will as your asset transfer device, there would be a second ancillary probate in Florida related to the home.
This will make the administration process all the more complicated. On top of the dual probate proceedings, your executor has to deal with an out-of-state court.
A Revocable Living Trust Can Provide a Solution
You can avoid these issues quite simply if you take the right steps when planning your estate. If you use a revocable living trust as the centerpiece of your plan instead of a will, you will be the trustee while you are living. As a result, you would maintain complete control.
The idea is to convey your real property and other property that will comprise your estate over to the trust. When you are drawing up the trust declaration, you name a successor trustee to administer the trust after your passing.
When that time comes, the trustee will be able to handle the business of the estate outside of probate. There would be no court involvement in either state, so the drawbacks would be completely avoided.
This is just one of the benefits that go along with the utilization of a living trust. We will not get into the other ones here but stay tuned because we will cover them in an upcoming blog post.
Access Our Estate Planning Worksheet!
We have developed a worksheet you can use to get a better understanding of this important process. There is no charge, and you can get a copy right now if you visit this page: Greenville, SC estate planning worksheet.
Need Help Now?
If you are ready to work with a lawyer to put a plan in place or update your existing plan, we can help. Call us right now at 864-268-8244 to schedule a consultation appointment, and you can alternately use our contact form to send us a message.
