When drafting an estate plan, many thoughts and concerns enter one’s mind. As many Colorado residents will attest, avoiding probate is on the list of priorities when going through the estate planning process. It is considered an expensive process and could be a hassle for loved ones to navigate after your passing, making it something many want to avoid. However, unless a person specifically designs a estate plan to avoid probate and continually updates it, the probate will be necessary to distribute the contents of an estate after their passing.
When is probate necessary?
When a person passes, this typically signals the probate process to initiate. The debts and assets of an estate will be assessed, and through the direction of the executor, assets will be distributed and debts will be handled. However, without the probate process, creditors may surface, resulting in heirs, beneficiaries and even the executor facing lawsuits to address these debts.
Because the probate process is completed with the supervision of the court, there is a greater likelihood that the wishes detailed in an estate plan will be carried out. Because the will and the details of an estate plan are made public in the probate process, all assets, debts and costs paid by the estate will be disclosed. This means that, with the oversight of the court, the distribution of assets must be approved before paying creditors and providing assets to beneficiaries and heirs.
Alternatives to probate
If you seek to avoid probate, there are some alternatives available. A transfer on death deed could help pass real estate at the time of your death, helping to avoid probate specifically for this asset. However, this does not address all assets. Thus, if one has many assets and complicated finances, it may be imperative to take other steps.
A living trust can help one avoid probate completely. A living trust is a legal document that spells out how you want your property divided and who should care for your minor children. What is beneficial for a living trust is the fact that it takes effect while you are still alive. However, this does require one to transfer ownership of their property to the trust. This means changing title and deeds, as this will ensure you avoid probate.
It is important to note that these trust are revocable. This means that you can change them any time you need to. During your lifetime, you will be the trustee. However, a named successor trustee will take over after your passing or if you become incapacitated.
The estate planning process is filled with many questions and concerns. If one is seeking to avoid probate, it is important to consider what options are available and if a living trust has a place in your estate plan.