January 28, 2022
How to Avoid Probate? | Understanding Estate Administration
In this episode, Chris Berry answers: How to avoid probate?
Estate Attorney and Advisor Chris Berry of Castle Wealth Group answers questions on retirement and estate planning every Wednesday at 1pm. Register via this link or give our office a call at 844-885-4200.
Castle Wealth Group and Christopher Berry help families with estate planning, elder law, retirement planning, and tax planning from their offices in Brighton, Ann Arbor, Livonia, Bloomfield Hills, and Novi.
Castle Wealth Group helps families with their legal, financial, and tax planning for their retirement and legacy.
With the use of legal structures like revocable living trusts, Castle Trusts (asset protection trusts), Chris Berry and Castle Wealth Group can help your family plan, protect, and preserve what is important through their Retirement and Legacy Blueprint Process.
Now let’s talk about death probate. Welcome to Berry’s Bites please join our host attorney and financial advisor Chris Berry. Most people want to avoid probate upon death because it’s costly three to five percent of any assets typically get eaten up in costs. Also, it takes a lot of time at the very least in Michigan it takes three months to go through the probate process and then it’s also public, anyone can see what’s going through probate.
So how do we avoid probate well upon death by understanding how a state administration works so first we have joint ownership. So joint ownership is great for a married couple but I would not recommend naming anyone else joints to your accounts because if you do name like a son or daughter joint to your bank account and they get a divorce lawsuit creditor action bankruptcy then that money could be lost. And I want you to be taken care of I don’t want to see that money going anywhere else and then second we have beneficiary designations and beneficiary designations are basically a pillowcase to money approach which could be a problem if you have young children minor children or even young adults 18 to 25 because I’m young enough to remember if I were to inherit 5 000 50 000 or 500.
When I was going to school I would have been the coolest kid on campus but that might have been my only year on campus right so most people don’t want to rely on that outright distribution not just because of the poor financial mismanagement but also what happens if a child gets a divorce after inheriting this money where might half that money go or what happens if that child passes away where might all that money go it might go to an in-law versus going down to your potential grandchildren.
So that’s where a lot of people look to trusts as a way to pass assets because with the trust you can leave things to your children or beneficiaries in such a way so that whatever they inherit they have the opportunity to protect it from creditors so they could be the trustee they could decide how it’s invested they could receive all the income but as long as they choose to keep it inside of the trust it’s protected from creditors it’s protected from divorces and if you were to pass away the money stays in the bloodline now not all trusts do this a lot of trusts say it goes all right to the kids at 25 30 35 all you’re doing is launching a pillow case of money at those beneficiaries but if you set up the trust in the right way where we you build in what we call separate share trusts or legacy inheritance trust then this money could be protected.
But if an asset doesn’t pass through joint ownership beneficiary designation trust then it ends up going into probate and most people want to avoid probate because again three to five percent of any assets going through probate get eaten up in costs also it’s time consuming it takes at least five months to go through the probate process and it’s public now what’s the one thing that I didn’t mention a will right what about a last will and testament well all the will does is gives instructions to the probate court so if you want to avoid probate don’t rely upon a will that’s a big myth that a will avoids probate court it does not what the will does is gives instructions to the probate board so if you’re relying on a will based estate plan understand you’re probably sending your loved one to probate court and again if you want to avoid probate which is most people’s at least baseline goal with probate then please give our office a call at 844-885-4200 or reach out to us to book that 15-minute phone call to figure out if we can help you or not because again we don’t want to see things going into probing. Thank you.