When it comes to creating a trust, you need to be aware of the advantages and disadvantages of this type of estate planning. When it comes to trying to figure out the best way for you to pass assets to your loved ones after you have passed away, I trust is at the top of many people’s lists. However, just because something works for one person does not mean that it is going to work for you. This is a good lesson for you to learn as you continue in your estate planning journey. Understanding that what works well for my family may not work well for yours and vice versa is a great lesson to learn.
In today’s blog post from the Law Office of Bryan Fagan, we are going to talk about some of the advantages and disadvantages of creating trust. At the Law Office of Bryan Fagan, we pride ourselves on putting our clients first and in counseling them on how to best structure their lives to benefit themselves and their families. If you have any questions after reading today’s blog post, then please do not hesitate to contact our office for a free of charge consultation. These consultations are a great way for you to learn more about the estate planning circumstances that you may be facing.
Avoiding probate: at the top of everyone’s list of estate planning goals
the attorneys with the Law Office of Bryan Fagan have been fortunate to be able to work with many families who haven’t gone through the estate planning process. And being able to work with these folks one of the major goals that clients have discussed with our office is to be able to avoid the probate process. Having to go through probate means waiting an extended period for assets to be distributed and debts to be paid. The case is paid for out of the proceeds of the estate so as time goes by the estate’s value decreases. Probate should be avoided if possible.
With that said, we can compare the ability to avoid probate when looking at a trust versus a last will and testament. Wills and trusts are the two most common forms of estate planning for Texans. Both offer distinct advantages and disadvantages. However, one of the most significant advantages of creating a living trust versus a will is that trust allows you to avoid probate court. Let’s spend some time discussing this point further while we focus on why it is important to avoid probate, if possible.
We have touched on a key point that probate can cost a significant amount of money. That the costs of probate are borne out of the proceeds of an estate makes it even more essential that you carefully consider your options before determining whether a trust or a will is the direction that you should go in when it comes to estate planning. Probate is essential for some estates when it comes to distributing assets and paying off debts. In certain situations, you will find that it is unavoidable to go through probate. However, a trust may help some of you out there avoid probate altogether.
Another facet to this discussion is that if you own property in more than one state then it could be the case that your family will have to go through multiple probate courts in each state. The costs and time associated with each case would vary and there will be a great deal of uncertainty associated with each. This is not to say that the property you own would not be properly distributed. However, what it does mean is that the more probate cases you have the greater the likelihood that something could go wrong, or the process could be delayed. In this circumstance going through probate could be especially difficult for your family.
Planning your estate diligently and going through all the different options available to you would be the choice that makes the most sense for you if you want to avoid probate. If you are sitting at home and wondering how you can avoid probate, then no one advanced that simply going through the estate planning process can be the solution that you were looking for. Take the time now to learn about the different options available to you so that you do not make mistakes and possibly cost your family money and time.
A factor that many people do not fully consider as their estate plan is that there are many parts of an estate planning case when it comes to money, time, and resources. However, it should not be disregarded that of all the resources and factors in an estate planning case, the one thing that you cannot create more of is time. Time is a resource that all of us know is finite. We cannot create more time. The 24 hours in a day are all we get to do what we need to do. Certainly, anyone who has waited a long time for something knows that the time spent waiting cannot be gained back in some way. With that said, we need to discuss how trust can help you with gaining an advantage when it comes to saving time.
The length of time for your probate case in Texas can vary. You should expect the case to take at least a few months and can potentially take up to one year to complete. Your reality is that the case may take somewhere in between those two extremes to complete itself. With that said, you can see just how not having to go through this waiting process can be advantageous for your family. Remember, once the case gets into the probate process there is not much your family can do to remove it before the case is dismissed. By the same token, when you are planning your estate, the reality is that this is the last thing you can do to help your family handle financial matters related to your estate.
To better illustrate this point about the importance of saving time in a probate case, let’s use a hypothetical situation involving you and your family. Suppose that your estate plan did not utilize any of the advantages of trust creation. Rather, you created a will and left it at that. In theory, there is nothing wrong with this. Estate planning is something that every adult should do. A will is the most basic form of estate planning and if more people created wills their families would be better off. However, in this situation, the creation of a will did not help your case to avoid the probate process after you passed away.
The person that you named as executor of the will had to probate the will before distributing any of the property contained in the estate. This means going through a probate case including filing the case, obtaining authority from the court to proceed as executor, having letters testamentary provided to you, and then settling debts and ultimately distributing property. While all of this is done every day by executors and probate courts across the state of Texas, that doesn’t mean that it is done without any sort of impact on families like yours. Remember, the goal of saving time matters truly when you consider that they are affected by the time spent in the probate case itself.
Let’s add to our hypothetical situation by assuming that you have a niece who is a single mother. Your single mother’s niece takes care of her three children as best she can but could always use a pick-me-up when it comes to some additional financial help. You and your wife have always done the best you can to assist her during her day-to-day activities as a mother. Part of those responsibilities that she has would be paying for daily costs associated with her children like medical care and costs of schooling the children. As any parent knows, these costs can add up over time.
As a result, you and your wife have always been happy to help for wherever possible. When it was time to create an estate plan, your niece was one of the first people that you thought about as far as members of your family who could be greatly assisted or helped by the funds in your estate. So, you decided to leave a great deal of property on your lease. Your thought was that this would be the best way to help her especially if you passed away when she still had young children.
As the circumstances allowed, you did pass away while she still had teenage children in the home. Your wife acted as executor of the estate but found that she would need to go through probate to distribute your property. Following all the procedures of the court, your wife discovered that the probate process was going to take several months to complete. While your wife had the family home and other assets that passed to her without probate being necessary, your niece was left in a position where she had to wait months to receive property out of the estate.
At a certain point, time and money intersect as far as competing resources. The time spent attending to matters related to probating your estate could have been saved had you gone through your estate plan to create a trust rather than a will. This could have allowed you to pass the property to your niece sooner rather than later. The situation turned out that money had to be held up in probate first before it could be distributed to your niece.
The bottom line is that all options should be pursued when it comes to your estate. If you were unaware of what a trust was or if you simply did not understand its benefits, then that would be understandable. Most people do not possess an extremely large amount of knowledge about the estate planning process. However, if you choose to work with an experienced estate planning attorney then you would have all the resources necessary to make an informed decision about your estate and how to proceed as intelligently as possible. Again, there is nothing wrong with creating a will as an estate plan. However, you should pursue the best options for your family based on considering the most amount of information possible.
Before you jump into a specific type of estate plan, it makes sense to reach out and contact the Law Office of Bryan Fagan first. Meeting with one of our experienced estate planning attorneys does not commit you to anything as far as hiring our office. In these free-of-charge consultations, we can walk you through the different options that may be available to you after diligently listening to what you have to say and answering questions that you may have. From there, you can decide whether hiring an attorney would be something that makes sense for you and your family.
Probate cases are public
Another consideration that may factor into the decision-making for you and your family as to what kind of estate planning vehicle is best for you all is that a probate case is a public record. When we talk about using a living trust to avoid probate that also means that your private, financial matters stay that way. When a probate case is filed then that case becomes part of the public record and can potentially be looked up by interested persons. When a hearing is held in the case anyone off the street can attend the hearing. For some of you reading this blog post that may not sound like a major issue. However, for others of you, this may be something that you wish to avoid at all costs.
Control your finances as much as possible by creating a trust
Ultimately, what we are searching for when we engage in estate planning is to be able to maintain some degree of control over our finances after we pass away. For many people, this is a reality that does not truly sink in until it may be too late. However, there is some finality associated with estate planning given that you will no longer be with us when your estate plan needs to be examined further. At that point, the effectiveness of the plan will be judged by the experience of your family in attempting to settle the estate.
When you have a living trust you can protect your family in a variety of different ways. For instance, you can decide to not distribute certain types of property to certain family members until they reach a certain age or graduate from school. Additionally, if you are concerned that assets are money may become susceptible to creditors or ex-spouses then a trust would be a sensible option for you to pursue as far as shielding your assets on behalf of those whom you want to receive that property after you pass away.
Finally, if you have any special needs members of your family like a spouse or children then those folks can be provided for within the trust, as well. New paragraph the reality of the situation is that you do not have to distribute all your property immediately after you die. When you have a living trust You can determine how the property you own is distributed. Under a will, once the probate court gives your executor the go-ahead to distribute the property it must be done in a certain period. Their trust gives you greater autonomy over the situation.
This can be important if you have a family member who needs the property to be distributed later for any number of reasons. If you have a brother who is going through issues with creditors, then he may not want to receive that property now. With a trust, he can settle his debts and then receive property later if that is his choice. Once debts have been settled or discharged through bankruptcy there would be more money available to him.
With so much at stake in a probate or estate planning situation, you need to have as much trustworthy information as possible. The Law Office of Bryan Fagan thanks you for joining us today here in our blog. We post unique and informative content daily and hope that you will join us again tomorrow. New paragraph
Questions about the material contained in today’s blog post? Contact the Law Office of Bryan Fagan
if you have any questions about the material contained in today’s blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning attorneys offer free-of-charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas estate planning as well as how a probate case could impact the life of your family.