If you do not have a revocable living trust and are using a simple will to pass your estate to your loved ones at your passing, the executor named in your will is going to have to open up a court proceeding in order to transfer your assets to your heirs. Your executor will be responsible for reporting to the court all the assets of your estate, your debts, and your beneficiaries. This process is called Probate. Now that you know what probate is, you may be wondering which of your assets are subject to it. Generally, any assets that you own in your name alone are subject to probate. This includes:
-Your primary residence
-Any other real estate you own
-Any bank or investment accounts you have in your name alone
-Any stocks or bonds you own
-Other personal property, such as furniture, jewelry, and collectibles
There are a few exceptions to this rule. Certain assets, such as life insurance policies and retirement accounts, often have beneficiary designations which will bypass probate and distribute directly to the beneficiaries. However, for all other assets held in your individual name, the only way to transfer them to your beneficiaries is to open a Probate. For individuals that wish to avoid probate, there is a solution. If you have created a revocable living trust, the assets held in the trust will not be subject to probate and will pass directly to your loved ones in the way that your design in the trust agreement.
Probate can be a complex process, and it’s important to make sure you understand how it will affect your estate. If you are unsure whether or not an asset is subject to probate, it is best to review your estate plan and your specific assets to make sure that your estate is passed on to your loved ones in the most efficient way possible.
If you would like more information on revocable living trusts, probate and how it works, please contact us today!