Probate is a legal process that you may want to avoid when you are planning your estate. Before we look at the drawbacks of probate, we should emphasize the fact that it is not inherently negative, and it serves a purpose.
Probate Purpose
It would not be fair for the people named in a will to receive their inheritances if the decedent had outstanding debts. Creditors must be notified during probate, and they are given an opportunity to come forward seeking satisfaction.
This is one of the purposes of probate, and there is also a proving of the will. The court examines the document to make sure that it was executed properly. If anyone wants to come forward to contest the validity, they would be allowed to do so during probate.
Probate Drawbacks
Though these safeguards are understandable, the process is not necessarily positive for the rightful inheritors. First off, there is a waiting game that must be played. It will usually take about nine months to a year for probate to run its course, and no inheritances can be distributed during this interim.
Probate is not free by any stretch of the imagination. There are court costs and potential legal fees, accounting charges, liquidation and appraisal expenses, and other incidentals. In a real sense, the money that is spent during probate comes out of the pockets of the heirs that are named in the will.
You may have read about the way that celebrities that have passed away distributed their resources. Did you ever wonder why this information is available? The press can access the details because probate records are available to the general public. If you are like most people, you value your privacy, so this is another negative.
Revocable Living Trust
If all of these pitfalls do not sound very appealing, you can avoid them if you utilize a revocable living trust as the centerpiece of your estate plan instead of a last will. You don’t have to worry about losing control of the assets, because you can act as the trustee and the beneficiary while you are alive.
In the trust declaration, you name successors to assume these roles after you pass away. After you are gone, the trustee would be empowered to distribute assets to the beneficiaries outside of probate. As a result, the drawbacks that we have looked at are avoided.
The probate avoidance facet is just one of the benefits of a living trust. Unfortunately, a high percentage of elders become unable to handle their own affairs eventually. To account for this, you could name a disability trustee to administer the trust in the event of your incapacity.
Spendthrift Protections
Another nice thing about a living trust is the ability to include spendthrift protections. You could add a spendthrift clause that would prohibit the beneficiary from directly accessing the principal. The trustee could be instructed to distribute assets to the beneficiary on an incremental basis over an extended period of time to prolong the viability of the trust.
Creditors of the beneficiary would not be able to go after the principal, and this is another level of protection that can give you peace of mind if you have a spendthrift in the family.
When you have a living trust, you streamline the estate administration process. The fact that probate would not be a factor is part of this equation, and when all the assets are owned by the trust, it makes the trustee’s job that much easier.
It should be noted that you can add a pour-over will to allow the trust to absorb assets that were in your personal possession at the time of your passing.
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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.
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