Your estate plan includes your wishes for distributing assets after your passing. Various methods may be used, so it is important to make informed decisions.
Estate Administration
Estate administration is an important consideration if you want your loved ones to receive their inheritances in a timely and efficient manner.
Many believe that beneficiaries receive their inheritance quickly as long as there is a will. In reality, this is not the case.
A will must be submitted by the executor to a court for probate. The court supervises the administration of the will, and no distributions occur until the end of the process. In most cases, the process takes eight months to a year. Another drawback is the loss of privacy since probate records may be accessed by the public. In addition, probate expenses reduce the value of the estate.
It’s also important to note that a will often provides only for lump sum inheritances. This can be a source of concern if your beneficiary is not good with money.
Living Trust Administration
The revocable living trust is a very popular alternative to a simple will, and can be the ideal centerpiece of your estate plan. Under a trust, you act as the trustee while you are alive and fully competent, and you name a successor to assume the role after your passing.
Any adult willing to accept the responsibility may act as the successor trustee, and a beneficiary may be named as the successor. A professional fiduciary, like a trust company, may also be named.
A significant percentage of elders become unable to handle their own affairs. A successor trustee may also assume the role in the event of your incapacity.
After you are gone, the trustee pays taxes and other outstanding debts, and distributes the assets to the beneficiaries. The administration of a living trust is not subject to probate, so your family does not have to play a court-supervised waiting game.
If a beneficiary struggles to manage money, you may include a spendthrift clause. This will limit the beneficiary’s access and shield the money from creditors.
With a trust, you set the distribution terms. It is possible to allow the trust to remain intact for an extended period of time to provide limited incremental distributions to a young beneficiary or someone prone to reckless spending.
Legal Assistance
If your successor trustee is a family member or friend with little financial experience, he/she may need help. If we work with you to establish your trust, we will have a thorough understanding of your situation. When the trustee is called upon, we can provide assistance during the trust administration ensuring a smooth process.
Take Action Today!
If you have no estate plan, today is the day for action. If you have a plan, we can help you make any necessary revisions.
A living trust can be the right choice for a wide range of people, but there are many tools in the estate planning toolkit. Devising a plan to meet your needs requires an understanding of your family dynamics and goals.
Schedule a consultation appointment at our Oklahoma City estate planning office by calling 405-843-6100. You may also send a message by filling out our contact form and we will get back in touch with you promptly.
- What Happens to Assets When Creating a Trust? - February 27, 2017
- Are Living Wills Different from Regular Wills? - February 28, 2017
- Why Wills are Such a Common Estate Planning Tool? - March 1, 2017
