Independence Day is coming up soon, and you’re probably already thinking of ways in which you can celebrate one of America’s most fun holidays. In between all the red, white, and blue, remember that the idea of independence can stretch across all kinds of areas, including those that you hold most dear. Have you thought about your future lately? And not just what you’re going to do tomorrow, or even weeks from now, but the future that will go on after you pass away. 

Estate planning helps you prepare for such a future. It ensures that you’re able to spare your family the tedium and expensiveness of probate court via tools such as living trusts, gifts, and documents that will help keep your estate out of the legal system. In this article, we’ll talk about why your estate needs its “independence” from probate court. 

What is probate court? 

After you die, the world is left with your estate, which includes, among many things, your assets and debts. Your asset need to be distributed, as do your debts. Probate court is a special area of the legal system in which a judge uses your assets to pay off your debts, and then assigns whatever is left to your relatives. It’s basically the management and distribution of your estate using the legal process. Someone in your family is assigned the position of executor, and it is his or her job to oversee the winding down of the estate. 

The Costs of Probate Court

Probate court can take at least a year, and there’s absolutely no guarantee that you’ll be able to have your assets distributed the way you want. There’s also no guarantee that your debts will be paid off in a manner you find appropriate for your family’s financial situation. The judge’s first goal is to get the creditors and IRS paid. Your loved ones come second to debtors and tax collectors. 

While your estate is tied up (the more complicated the estate, the longer it’ll take), your family won’t have access to your assets. If they need money to pay bills, they are out of luck for the duration of the court process. Probate court requires a judge’s approval for basically every little thing. If your family goes through probate, a judge will run interference throughout the whole process, which will make the whole estate windup very protracted. 

There’s also the expense of a legal proceeding. Filing fees can be several hundred dollars. While these fees come out of the assets of your estate, that’s still giving money to the courts that could have gone to something your family really needed. 

Zero Privacy

Lastly, probate is not a private process. Probate court records are a public matter, and information about your liabilities, assets, representatives, and beneficiaries are all out there for the public to see. If someone wants to know something about you, they can read the probate file easily to find out, whether they do it by asking a county clerk (who is unlikely to care why the person wants to read your file) or by going online. Avoiding probate means that your family gets privacy. 

Estate planning tools are there to help your family avoid the tedium, expense, and lack of privacy that comes with probate court. There are legal mechanisms that can give your family immediate access to your assets without requiring them to pass through court. Consult a planner today to make sure you’re getting your own “Independence Day” from costly and time-consuming legal processes. 

When you think of estate planning, you might picture in your head a last will and testament from someone who’s ninety years old. That, however, is not the case at all (though certainly that is a common document and age range). Estate planning is a young man’s game too, and college kids need a power of attorney the same way someone five decades their senior does.

You should encourage the college-age kids in your life to get a power of attorney. In this article, we’ll discuss what a power of attorney is, as well as why college-age people should have one.

What is a Power of Attorney? 

If you become unable to manage your own affairs due to incapacitation (illness, injury, mental incompetence, etc.), a power of attorney is the person you legally appoint to manage your affairs in your place. Even if you have absolutely no problems on the horizon and are in perfect health, you still should have a power of attorney. There are a few different types of power of attorney. These include general, special, and healthcare. You should also know the term “durable power of attorney.” 

General power of attorney gives a person broad authority to act on your behalf for a wide range of different issues. This type of POA is included in an estate plan most often. The special power of attorney is narrower in scope, and you assign to the special POA only those powers you wish them to have. A healthcare POA makes healthcare decisions for you if you’re too sick or injured to make them. 

Lastly, a durable POA is just a document ensuring that there won’t be any issues in keeping the authority of the general, special, or healthcare power of attorney intact in the event that you’re too incapacitated to make your own decisions. The durable power of attorney can also go into effect if you’re mentally incompetent to handle decision-making, and you can choose the doctor(s) you want to determine your competency to lift the POA. 

Why do college kids need one? 

Estate planning is based on the fact that no one is infallible. It is the best way to prepare for the “what ifs” in life, and college kids are still vulnerable to different types of illnesses and injuries. They certainly aren’t injury- and sickness-proof while they’re away from home. Having a college-age kid sign a power of attorney ensures that kid’s parents will be able to manage their affairs, should the kids become unable to do so. As the kids are 18 and no longer minors, they can pick any adult they trust, related or unrelated. College kids don’t have many assets, but they do have bills, a bank account, and digital accounts that need to be managed if something happens. 

Kids who are in college rarely think anything can happen to them, but, unfortunately, that isn’t always the case. It’s important to be prepared, and having a power of attorney is a necessity for anyone who is no longer a minor.

Father’s Day has just passed, and you’ve probably either given or received some pretty great gifts. If you’re a dad, or someone related to a dad, you should know that the spirit of celebration doesn’t have to end just because the holiday is over. There is still a great gift you can give someone in your life, whether you’re giving the gift as a father or to a father. This is the gift of estate planning. Estate planning is the process of arranging and assigning the way in which your assets and debts will be distributed after you pass on. 

Without an estate plan, your family could be looking at some time (and money) spent in probate court trying to figure out what to do. To spare them that tediousness, below are some common estate planning documents you should know.

529 Plan 

     A 529 plan is a tax plan that allows you to set aside some of your assets for the kids in your family who will be going to college. This plan is also called a “qualified tuition plan.” The qualified tuition plan can be sponsored by states, state agencies, or state institutions, and it comes with tax advantages. The 529 plan can operate as a savings account designed to accrue federal and state tax benefits (income tax breaks, low maintenance, simple reporting, control of the account, and more). The impact on financial aid is minimal.

As an alternative to a savings plan, you can have a prepaid plan, which will pre-pay tuition for colleges, either in full or in part. These 529 plans are generally fine to use for out-of-state colleges, but you should check with your estate planner to ensure that they are usable.

Living Trust 

    A living trust is different from a last will and testament. The living trust has three parties: (1) you, the donor, (2) the trustee, and (3) your beneficiary. You give nominal title to the trustee, who passes the title of the asset to the beneficiary after you pass away (or whenever you decide you want your beneficiary to have it). You don’t have to go through probate court with a living trust the way you do with a last will, as a living trust goes into effect immediately. Depending on the trust, it can be revocable or irrevocable. 

Guardianship 

     Naturally, a Father’s Day post couldn’t go by without mentioning the kids who have made you a father. An important part of estate planning for those with minor children is deciding who will have guardianship of them in the event that something happens to you. Keep the guardianship plan updated if there are any changes (for example, if the person you would have chosen can no longer take the kids, make sure you immediately change your estate plan to reflect that). Having someone you trust as a guardian will give you peace of mind and benefit your kids immensely should something happen.

These are just some of the many documents that go into estate planning, and there are tons of other tools in the toolbox that will be right for your particular financial situation. Consult with an estate planner today to keep the Father’s Day gift-giving going. 

            Most of us have probably had a sunburn. Those of us with easily-sunburned skin know the stinging pain that comes along with it. Though our beach day might have been fun, the aftermath was not quite so nice. However, sunburns aren’t the only thing that can cause a major sting. Think of probate court as the judicial equivalent of a sunburn: annoying, uncomfortable, and definitely not what you want to be dealing with. Here’s a brief overview of what probate is, how you get there, and how you can avoid it.

What’s Probate?

            Probate court is a court that deals with the division of your assets and repayment of your debts after you die. It handles validation of a will, identifying and taking an inventory of the deceased person’s property, and dividing said property up according to state law (after debt repayment, of course). State by state, the process of probate court varies, but here are some elements of the process that you need to know, and they don’t vary a whole lot across-the-board.

First, you should know about the executor. This person can be named in your will. Or, a judge can appoint him or her if you die intestate or fail to name the person. The executor has a lot to handle. He or she validates your will, presents a judge with an inventory of property and debts, and gives a list of who should inherit the property and assets that you’ll have left after the debts are wiped out.

The executor notifies your creditors and family members of your death so that people can make requests. The executor has to decide what to do if you come up short. If you’ve granted cash gifts that you don’t have when you die, the executor might decide to sell some of your property in order to make ends meet. This is just one example of the way in which the executor will work with the court to settle up your property. This process usually takes a year or two, but it can take even more, depending on your circumstance and the court’s schedule. Overall, probate is a long, arduous ordeal.

How Do I Wind Up There?

            If you die intestate (which means being deceased without a will), you’ll end up in probate. People might be under the impression that you can avoid probate if you have a last will and testament, but that actually isn’t true. The executor still has to go to court and validate the will. A will must be authenticated. Otherwise, it isn’t going to hold up in court. Lawyers will assist in the validation process, as it varies based on state law.

            Having an estate plan that doesn’t address important documents recommended if you want to avoid probate is a way that you wind up there. Especially when it comes to the appointment of your executor, your family will not like the process at all. If the judge appoints someone you didn’t intend to manage your affairs, things will go likely downhill rapidly.  

Yikes! How Can I Avoid That?

            Avoiding probate court involves some legal footwork, such as establishing a living trust. This legal tool is a three-party fiduciary relationship that is effective immediately. You, the donor, give nominal title to the trustee, who then confers the title to your beneficiary when you designate them to do so (i.e. after you die, usually). Joint tenancy arrangements are also not subject to probate, depending on state law. Your estate planning attorney will help you work out ways to keep your family out of probate.

            When it comes to this judicial sunburn, you want to take all the necessary precautions. Consider a living trust (as well as smart estate planning overall) your equivalent of SPF 50 sunscreen. Good estate planning and consulting with an estate planner will save your family time, energy, and stress. A sunburn might last just a week or so, but the sting of probate lasts way, way longer.

Everyone’s mom has, at some point or another, given them advice that has been extremely important, whether they realized that at the time or not. Moms really do give the best guidance, and they also are really great at making sure everyone is prepared, whether it’s making school lunches, helping get homework done, getting everyone on the bus in time, or doing one of the other million things that superwoman moms do. Not only do your mom’s lessons apply during your childhood, they are also relevant when it comes to your adult life.

There’s no better way to be prepared than to have an estate plan. The consequences if you don’t one will be far worse than they would be for forgetting your homework or missing the bus. Now that you’re an adult, being prepared takes on a whole new meaning, and planning your estate is something you should take very seriously.

What is Estate Planning?

Estate planning is pretty easy to understand as a concept. It involves creating a plan for what will happen to your assets after you pass on. You can have these assets transferred to loved ones, donated, or dispersed however you want. Here are some great ways you can use estate planning to help plan in advance for you and your loved ones’ future:

• Healthcare directives. If you’re ever in the hospital and are too incapacitated to tell the doctors what you want, you’ll need to make sure that you have a plan. Otherwise, you might not receive the medical care you desire. A healthcare directive is a series of instructions from you to the doctors, nurses, and hospital on how to take care of you in the event that you’re too sick to tell them yourself.
• Power of attorney. Your power of attorney also takes care of you when you are incapacitated or unable to make decisions for yourself. How it works is simple; you pick someone you trust and they will be in charge of your financial decisions if you cannot make them. By selecting the person yourself, you ensure that you won’t be giving financial information to someone who might misuse it.
• 529 Plans. If you have a loved one that will be getting ready to go to college, you should invest in a 529 plan. This plan allows you to set aside funds for the child’s college fund. These assets will be transferred at the time of your choosing.
• Living trust. This is a three-party relationship of a fiduciary nature. You, the donor, transfer nominal title to the transferee, who is the trustee. The trustee then, on your instruction, will transfer title to the beneficiary, who is the person you want to receive your assets in the end. A living trust goes into effect immediately and allows you to avoid probate court.

These tools are just some of the many that will help you be prepared in case you pass away. Your estate, if you don’t have a plan, will end up in the grasp of probate court, which is very costly.

Probate Court Explained

Probate court is what happens when you forget your homework, so to speak. In probate court, if you’re there, it is because you forgot to make an estate plan, or you don’t have the documents in the plan that would allow you get out of it. In probate, your assets are divided up by a judge who first eliminates debts and then divides what’s left evenly. It’s unlikely that your property and debts will be divided up the way you want them to be, and your family will not be happy with the increased cost and time that probate court takes.

Mother knows best, and you can take heed of her instructions even in your adult life by being prepared and consulting an estate planning attorney.