Efficiency is the name of the game when you are engaged in estate planning, and when you choose to execute a will as your instrument of transfer you may be choosing an inefficient route. A will has to pass through the legal process of probate, and this is when the probate or surrogate court supervises the administration of your estate. Probate is not a bad thing in many cases because some estates are complex, and all interested parties may not be on the same page. Having the court there to provide transparency as the details are being hashed out can be a welcome protection in spite of the pitfalls of probate.
What are these pitfalls? For one thing, the process of probate can be very time consuming, taking anywhere from nine months or so to several years, depending on the details of the case. Probate can also be expensive. There are court costs to pay, attorney fees, executor fees, and possible accountant fees, liquidation expenses, and appraisal fees. Plus, probate opens the door for people to contest your will, and this is something that does not sit well with a lot of our clients.
All of the above can be avoided through the creation of a revocable living trust. You place your assets into the trust and though you relinquish ownership, you retain control because you can name yourself as the trustee and the beneficiary. Of course you also name a successor beneficiary, appoint a successor trustee, and spell out the terms of future distributions. Those who want a financial professional to administer the funds will want to engage the services of a trust company or bank to act as the trustee. When you pass away, rather than going through probate, the assets in the trust will be directly distributed to your beneficiary or beneficiaries in a direct, efficient, and cost effective manner