If you use a will to state your final wishes, it would be admitted to probate, and the court would supervise while the executor is administering the estate.
This court will also preside over intestacy matters. When a person dies without a will or a trust, the estate has to be sorted out somehow, and the court will assume control.
Probate Drawbacks
Probate serves a purpose because the decedent’s creditors are notified, and they are given time to seek payment. The will is examined by the court to determine its validity, and if anyone wants to issue a challenge, they can make a case while the estate is being probated.
Though it is not inherently negative, probate will take eight months at minimum in most cases, and no inheritances are distributed while the estate is going through probate. This is a significant negative, and probate expenses reduce the value of the estate.
If you use a will that is admitted to probate, your privacy would be gone, because interested parties can access the records to find out how the assets were distributed.
Probate-Free Asset Transfers
There are a handful of asset transfer types that are not subject to probate, even if you are not using them in an effort to avoid the process. One of them is the payable on death account or Totten trust.
When you open an account at a bank or a brokerage, you can make it a payable on death account by adding a beneficiary. If you pass away before the beneficiary does, the funds will be released to them after they present the death certificate to the institution. The probate court would not be necessary.
Some states have payable on death options when you register your car or truck. You can name a beneficiary, and they would assume ownership of the vehicle after your passing. The probate court would not be involved. Unfortunately, New York is not one of them, but they have this option in New Jersey and Connecticut.
If you own property, you can adjust the ownership documents to create a joint tenancy. In so doing, you would be giving the person that you name co-ownership of your home.
The surviving joint tenant would assume ownership of the deceased joint tenant’s interest in the property outside of probate.
Revocable Living Trust
You can use a revocable living trust as the centerpiece of your estate plan if you want to implement a proactive probate avoidance strategy. The first step is to create and fund the trust, and you would be the trustee while you are alive, so you don’t surrender control of the assets.
Your heirs would be the beneficiaries, and you name a successor trustee to act as the administrator after your death. This can be someone that you know personally, and you can alternately use a professional fiduciary like the trust department of a bank or a trust company.
After your passing, the trustee would follow the instructions that you leave in the trust declaration. Assets would be distributed to the beneficiaries in accordance with your wishes, and probate would not be a factor.
The avoidance of probate is one reason why people use living trusts, but there are other benefits, including the ability to provide spendthrift protections. You should definitely consider the utilization of this type of trust when you are planning your estate.
Schedule a Consultation!
If you came to this site because you are ready to put a plan together, we are here to help. We understand that it can be disconcerting to discuss personal matters with someone you have just met.
When you choose our firm, you can rest assured that you will feel comfortable from the start, and you will recognize our sincere commitment to your family’s well-being.
You can watch our on-demand webinar prior to scheduling a consultation at our Manhattan, NY estate planning office if you give us a call at 212-973-0100, and you can use our contact form if you would rather send us a message.
While he was in law school, he worked as an aide to the late John Sparkman, Senior Senator from Alabama. This gave him the opportunity to gain intimate knowledge of the workings of government, and this background has served him well.
He started his private practice in New York in 1974, the first Sikh to be admitted to the bar in the state of New York.And in 1995, when he narrowed his legal focus to the areas of estate planning and elder law, the prestigious American Academy of Estate Planning Attorneys accepted him into their membership.
Special needs planning is an important aspect of the field, and Mr. Khalsa has intertwined his empathy with his expertise to become a leading advocate in this area. Shortly after the Education for All Handicapped Children Act was enacted in 1975, he won the first case in New York that was adjudicated under this law.
S.J. Khalsa has a penchant for philanthropy, and he has raised well over $20 million for charities nationwide. He is a deeply spiritual man who represents the Sikh religion at religious and interfaith gatherings all over the globe.
He believes that successful professionals should contribute to the fabric of their communities, and to this end, he works with law enforcement in New York.
Mr. Khalsa is a graduate of the FBI Citizens Academy program, and he is active in their Alumni Association. He is a member of the FBI/New York Police Department Joint Task Forces on Civil Rights and Hate Crimes, and he sits on the Community Engagement Council that advises the FBI Assistant Director for New York.
He is the author of the highly acclaimed book, Estate Planning Essentials: A Guidebook for Modern Families. Lawyers of Distinction recognized him for his excellence in 2020, naming him a 2020 Power Lawyer, and he is a member of the prestigious American Academy of Estate Planning Attorneys.
Mr. Khalsa lives in Manhattan with his wife, and he has two grown children and four grandchildren. He likes to travel, and he is an avid golfer. As the co-owner of Kundalini Yoga East in New York along with his wife, he instructs practitioners and aspiring yoga teachers.
- An Overview of Long-Term Care Insurance - March 22, 2023
- How Do You Prevent a Will Contest? - March 19, 2023
- NY Community Medicaid Program Can Facilitate In-Home Care - March 6, 2023
