Understanding Probate and Exploring Alternatives for Families with Children

When a person passes away, their assets and property need to be distributed according to their wishes. This process often involves something called probate. But what exactly is probate, and are there alternatives that might be better suited for families, especially those with children?

What is Probate?

Probate is a legal process that validates a deceased person’s will and supervises the distribution of their estate. During probate, the court ensures that debts and taxes are paid before the remaining assets are distributed to the beneficiaries named in the will. While probate serves an important function in protecting the interests of both creditors and heirs, it can be time-consuming, costly, and public.

The Role of a Will in Probate

A will is a legal document that states how a person wants their property and assets distributed after death. However, simply having a will does not avoid probate. In fact, a will must go through probate to be legally recognized and executed. This means that even with a will, your estate could be tied up in court for months or even years, delaying the inheritance for your loved ones.

Alternatives to Probate

Fortunately, there are ways to bypass or simplify the probate process:

• Non-Probate Transfers: Certain assets, such as life insurance policies, retirement accounts, and jointly owned property with rights of survivorship, pass directly to beneficiaries without going through probate.
• Trusts: A trust is a legal arrangement where one party (the trustee) holds and manages assets for the benefit of another (the beneficiary). Trusts can be designed to avoid probate entirely.

Why Trusts Are Better for Families with Children

For families with children, trusts often provide significant advantages over relying solely on a will:

1. Avoiding Probate: Trust assets generally do not go through probate, allowing for faster and more private distribution.
2. Control Over Asset Distribution: Trusts allow parents to specify when and how children receive their inheritance, which can be especially important if the children are minors or if the parents want to protect the assets from potential creditors or misuse.
3. Protection for Minor Children: Trusts can provide for the care and financial support of minor children until they reach an age deemed appropriate by the parents.
4. Professional Management: If the child is too young or inexperienced to manage money, a trustee can be appointed to manage the assets responsibly.
5. Flexibility: Trusts can include provisions for special circumstances, such as disabilities, education expenses, or even conditions for inheritance based on milestones like graduation or marriage.

What Trusts Can Accomplish for Families with Children

• Provide Ongoing Financial Support: Ensure children have funds for education, healthcare, and daily living expenses.
• Safeguard Inheritance: Protect assets from being squandered or taken in divorce or legal disputes.
• Set Conditions: Parents can set terms for when and how children receive their inheritance, such as staggered distributions or age thresholds.
• Plan for Special Needs: Trusts can provide for children with disabilities without jeopardizing their eligibility for government benefits.
• Maintain Privacy: Unlike probate, which is public, trust arrangements are generally private, keeping family financial matters confidential.

Want to see how we can help you?

We want to help you find the time to create an estate plan. We offer consultations on your terms, virtually, without any obligation. We offer strait forward pricing so that you can get the right plan for your family’s needs. Additionally, we will do something almost no one else does, we will fund your trust for you.