Many people look at estate planning as an exercise in expressing your wishes with regard to the way you want your property be transferred after you pass away. This is certainly a big part of the process, but you should also think about the estate administration component.
Last Wills and Probate
If you use a will as your vehicle of asset transfer, the individual that would act as the administrator is the executor. While it is perfectly okay to name someone that you know personally, you could alternately engage a professional. Some attorneys, accountants, banks, trust companies will provide fiduciary services.
The executor would not be able to act independently without court supervision. After your passing, the will would be admitted to probate. During probate, final debts must be paid by the executor, and the assets must be inventoried and prepared for eventual distribution to the heirs.
You should select someone with a good bit of financial acumen if you are going to use an individual to act as your executor. Obviously, trustworthiness is a necessary quality, and you should consider potential conflicts of interest. After the estate has been probated by the court, the executor can distribute inheritances in accordance with the terms of the last will.
Guardianship and Conservatorship
Another function of the probate court is to preside over guardianship and conservatorship matters. A conservator is someone that handles the financial affairs of a minor child or an incapacitated adult, and a guardian would act as a personal decision maker.
When you fully understand the difference between a last will and a revocable living trust, you will probably prefer the latter. You do not lose personal control of assets that you convey into a living trust, because you could act as the beneficiary and the trustee while you are alive and well.
The aforementioned process of probate is time-consuming, and the inheritors do not receive anything while it is underway. This time lag is eight months at minimum, and it can be longer if any complications arise.
In addition to the time element, there are a number of expenses that accumulate during probate. A loss of privacy is another drawback. Since it is a public proceeding, anyone can access probate records to find out how the resources were distributed.
With a living trust, the trustee can provide inheritances to the beneficiaries outside of probate, so these negatives are avoided. This is one benefit, but there are many additional advantages.
A trustee is very similar to an executor in many ways, but a major difference is the fact that the trustee may be needed for an extended period of time. This is because you have the ability to allow for limited distributions to beneficiaries over a number of years.
Once again, you can name someone that you know personally to act as the trustee of your living trust. All the same qualities would be required, along with a bit of legal knowledge. Of course, we can always be engaged to provide the necessary assistance during the trust administration process.
It should be noted that the same entities that provide executor services are fully qualified to administer living trusts. We are highlighting living trusts per se because this is the most commonly used type of trust, but there are others, and a trustee is always necessary.
Take Action Today!
We are here to help if you are ready to put an estate plan in place, and we would be more than glad to update your existing plan if it needs to be adjusted. You can call us right now at 843-815-8580 to schedule a consultation appointment. There is also a contact form on this website that you can use if you would like to send us a message.