Wealth Management & Financial Planning

Wealth Management & Financial Planning

Probate For the Unprepared

Probate: For the Unprepared

Two things are certain in this life, and we have all heard it: death and taxes. Each year, we work diligently to ensure our taxes are filed correctly and on time because we want to avoid answering to the IRS if they come knocking. So, if we spend so much time on our taxes (as we should), why do we pay so little attention to our Legacy plan? A lack of estate planning may not impact you, but it will affect your heirs. When I have conversations on this topic, most families assume they have a Will, and their Will dictates everything, and that's that. Many times, even if a family has a Will, it is outdated and may not even reflect the family’s wishes.

Although a Will dictates where assets go, it dictates it through a process called probate. Probate appoints an executor or personal representative and distributes a deceased person's assets. Probate can be costly to an estate, and it usually takes around nine months to get an estate settled and closed. The good news is that there are steps you can take now to avoid probate and reduce friction points for your heirs.

  • Make beneficiary designations on your account.
    • If someone is named as a beneficiary of your IRA, Roth, 401k, brokerage account, etc., those individuals receive their share of what you have designated to them while avoiding probate.
  • Transfer on death designation on your bank accounts.
    • You can go to the bank and add a beneficiary to your bank account, like a retirement account, which designates someone to receive this money upon passing.
  • Trust
    • You will want to speak to your attorney to see if a Trust is the correct option, but titling homes, cars, property, and other assets to a Trust can help you avoid probate.
  • Ladybird or Transfer on Death Deed on your home.
    • The home is usually the most significant asset for most families, and getting a Ladybird or TOD deed on your home can pass ownership directly to a beneficiary upon death and is very similar to a beneficiary designation on a retirement account.
    • You should speak to your attorney to determine how this is done and if it is right for your situation.
  • Life Estate
    • A life estate changes ownership of your residence to another person while still allowing you to live in your home.
    • An attorney could help you figure out if this is the right option for you, as well as help you create the documents.

A sound Legacy or estate plan helps you complete your financial journey. Please do not delay addressing this Critical Element of your plan any longer, and ensure you and your heirs are prepared. Losing a loved one is very difficult, and adding the stress of an incomplete estate plan makes it that much worse.

Financial Enhancement Group is an SEC Registered Investment Advisor. Securities offered through World Equity Group, Inc. Member FINRA/SIPC. Advisory services can be provided by Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

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