Too many people falsely believe that a will is the only estate planning document you need. However, having a complete plan, which often includes a trust, can prevent many problems with your estate after your passing. The Marietta estate planning attorneys at Georgia Estate Plan: Worrall Law are committed to helping our clients understand why creating a trust can be the best way to ensure that your wishes are honored when you are gone. Here are four risks to your estate if you choose to proceed without one.
Risk #1: No Direct Transfer of Family Real Estate
The number one reason to establish a trust is to allow your loved ones to inherit your real property in the easiest possible manner. Property that is in a trust will be transferred to the successor trustee as your trust provides. This process is relatively timely and will avoid long, drawn-out court processes. Remember, any assets in your name alone when you die are subject to probate in Georgia, so most people will need a trust if they wish to avoid court involvement.
Risk #2: The Rest of Your Estate Will Be Subject to Probate
Even if you have a will, your heirs will still need to open an estate with the Cobb County probate court to carry out your final wishes. A judge will need to see your will and ensure that it's valid, then he or she will officially allow the Executor to get to work. From there, your real estate will be inventoried and appraised. Next, outstanding debts will have to be paid by your estate before the probate courts distribute property. Besides your family paying your debts, this process can take between 9 to 18 months, or even longer!
Alternatively, if you pass away without having a will (known as intestate), the courts can take even more time to determine who inherits your assets. There are state laws that dictate who is the “next of kin” and these may not be the individuals that you want to inherit your estate. Finding these heirs and determining how much they stand to inherit according to such laws adds additional time and expense to an already burdensome process.
Risk #3: Probate can Drain your Estate Financially
When an estate goes into probate, many professionals (lawyers, CPAs, appraisers, etc.) will need to be consulted and hired, and governing bodies will become part of the distribution of these assets. Each step will cost time and money for your loved ones. And while your estate is tied up in this court process, your family will need to pay for these costs out of pocket until your assets are released. Think about it this way… the cost of hiring a lawyer to create a trust now is a tiny fraction of the costs of the probate to administer your estate when you are gone.
Risk #4: Your Cash Could Be Tied Up, and There Could Be Limited Funds to Pay Your Bills
If your financial accounts do not have properly named beneficiaries and an estate goes into probate, your money will be held up as well. This means your bank accounts will be frozen and your family will have no access to your funds. Your loved ones will be responsible for all the final debts that you have, including costs to settle your final affairs, bills, taxes, medical bills, mortgage payments, and funeral costs. Funds held in probate will not be released to cover any of these expenses until after the probate process is complete.
The good news is that by creating a trust, you can avoid just about all of these scenarios and ensure that your assets pass directly and privately to your loved ones when you are gone. If you have additional questions about creating a trust, or you are ready to begin the process of designing a comprehensive estate plan, contact our Marietta estate planning attorneys at 770-425-6060 to schedule a consultation.