10 Mistakes Which Will Result in the Need for Probate
Falvay Gocha Law - Attorney Kirk D. Falvay
Kirk Falvay Estate Planning Attorney

1. Improper title to assets.

             If you are trying to avoid probate, make certain all of your bank accounts and investment accounts are: 1) held jointly; 2) have a beneficiary upon your death; or, 3) held in the name of your trust. If any of your accounts are in your name only and do not have a beneficiary on death, a probate order will be needed to transfer them when you die.

2. Lack of beneficiary.

             If you do not have a beneficiary on your life insurance or your retirement account, when you die, these funds will be payable to your estate. That means probate. If the beneficiary you named now deceased? Is it a former spouse? If so, you need to name a new beneficiary.

             What if your beneficiary predeceases you, or dies in an accident with you? Make certain you have a contingent beneficiary. Without a contingent beneficiary, in those situations, the beneficiary will be your estate.

3. You have a trust, but all of your assets are not titled in the trust name.

             One of the reasons you have a trust is to avoid probate. If any of your assets are in your individual name when you die, it probably will have to go through probate to get into your trust. Make certain that all of the assets which you own (except for certain insurances, retirement accounts, vehicles, boats, etc.) are titled in the trust name.

4. You do not have a durable power of attorney.

             If you become incapacitated and are unable to make legal and financial decisions, who will act on your behalf? If you have executed a durable power of attorney, the person you have named will be able to handle your affairs. If you do not have such a document, the probate court may need to appoint a conservator to act for you.

5. You do not have a power of attorney for health care.

             If you are unable to make informed decisions regarding your health care or living arrangements, who will act on your behalf? If you have an executed durable power of attorney for health care, the person(s) you have designated will be able to make decisions for you. Without such a document, the probate court may have to appoint a guardian for you.

6. Your children inherit from you before they are of legal age and you do not have a trust.

             If you die and leave money or property to a child who is a minor, the law will require that a conservator be appointed for the child by the probate court. The conservatorship will last until the child turns 18, and the money will be turned over to the child at that time.

             If this is not a desirable result, consider establishing a trust, either under your will, or a living trust. That way you can avoid having the probate court oversee your child’s inheritance, and can direct the distribution of the money to your children for the things and at the times that you decide.

7.  There is no back-up named for the persons you appoint to handle your affairs.

             Maybe you do have a trust, will, durable power of attorney and/or power of attorney for health care. The person you have named is probably able and well suited to perform the assigned tasks. But after you become incapacitated or die, that person could become incapacitated or die. Do your documents name a successor? Is that named successor able or willing to serve? 

             If a successor is needed and no one has been named, or the person named is unable or unwilling to serve, the probate court may need to get involved determine the successor.

8. You fail to anticipate that your beneficiary might die shortly after your death.

             If a beneficiary dies before they receive their inheritance under your will or trust, it will probably have to be paid into their estate. That requires probate. You may want to consider including a clause in your will or trust which provides that beneficiary is deemed to have died before you if they do not survive you by 60 or 90 days. That way, if they die shortly after you, you will have decided where the inheritance goes. Your will or trust should also contain provisions to direct the inheritance if the beneficiary should predecease you.

9. You fail to anticipate that your beneficiary may be incapacitated.

             If your beneficiary under your will or trust is incapable of handling the inheritance due to a mental or physical infirmity, the inheritance may end up being supervised by the probate court under a conservatorship.  Also, if you know your beneficiary is not capable of handling an inheritance, you need to consider putting the inheritance into a trust for the beneficiary when you die.

             What if the beneficiary is incapacitated because he/she was injured in the same accident as you, or become incapacitated after you were incapacitated and you are incapable of changing your estate plan? The best solution to those possibilities is to leave your assets to your beneficiaries under the terms of a trust, and make certain your trust contains provisions which anticipate such occurrences.

             Also, if your beneficiary is receiving or may be receiving public assistance benefits, you may need to create a special trust for them to assure their continued eligibility for their benefits.

10. Your trust lacks important language.

             People pull trusts off of the Internet. They buy do-it-yourself kits. They ask their divorce lawyer to write the trust. Sometimes these trusts work just fine. Everything goes smoothly and as anticipated.

             Other times the results are not so good. If a trust does not address an issue which comes up, or does not adequately give the proper direction to the trustees, probate court is needed to provide the remedy. A beneficiary or trustee may need to petition the court to resolve issues which might easily have been avoided if the trust had been thoroughly and properly drafted.

             If you are planning on settling your estate by means of a living trust, you are best served if it is drafted by a qualified estate planning attorney. Also, make certain your trust is reviewed by an attorney every five years or so, as the laws are constantly changing.

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