Avoiding Probate through a Trust
We say it all the time – the best way to avoid probate is through a trust. However, it is really nice to see when others also agree with this advice. Please take a look at the article below. Because, as we know, revocable Trusts in Leawood avoid probate. This sounds easy and can avoid a lot of problems later.
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With the unexpected death of my baby brother this summer, I’m not waiting to get my affairs in order.
I remembered last week that I’d named Jeff ” who died of a sudden heart attack in July at age 55 ” as the payable-upon-death beneficiary on my checking and savings accounts. I promptly went to the bank and changed the beneficiary to my twin sister, as my daughter Jessica is a minor.
I did the same beneficiary change on my traditional IRA, Roth IRA (which I’ve been funding for Jess’ college) and 401(k), on which I had no beneficiary listed! if you’re married, your spouse is the legal and automatic beneficiary on IRAs. But I had my husband, now ex, sign away his rights to my IRAs days after I realized we were no longer a trusted team.
Without proper planning, the 401(k) and other assets with unnamed beneficiaries eventually would go to Jessica. But they could be held up in probate for months. When I wrote about wills and trusts in 2002, only one-third of Americans had wills and the national average for a probate was 16 months.
Upon my death, Jessica’s father would become her guardian, but I don’t want him in charge of money she’d inherit. I know my sister would be a good steward of assets and would distribute money to Jessica as needed and when she could handle it wisely.
Four years ago, Oklahoma’s banking laws were changed to allow a bank or credit union to release up to $20,000 to the heirs of a deceased person without probating the estate. But if the person died with a will, or if the person had other property such as a house, it may still be necessary to probate the estate.
The deed to my house is in my name only, and I need to do a transfer-on-death deed or something, and leave instructions about my car and personal belongings. I learned from past reporting that a written will holds more water than downloading a fill-in-the-blank template from the Internet.
My investment banker at Chase tells clients that it’s cheaper to get a trust than pay for an estate lawyer to handle probate. A friend, who’s an investment professional in Tulsa, said the cost of a trust and probate is about the same ” some $1,500 to $1,800 ” but it’s well worth the money to create a trust now, he said.
Under Oklahoma law, one-third of the estate ” in the absence of a will or trust ” goes to the surviving spouse and two-thirds to the deceased’s children. It’s split 50-50 if there is only one child. Single people’s assets will go to their parents.
The silver lining to my brother’s death, though a microscopic one, is I’m cherishing each day and vowing to no longer sweat the small stuff. I’m also putting my affairs in order now, with plans to create a trust the soonest I possibly can.
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