It is Important to Know the Difference Between Probate and Nonprobate Assets

Mortgage concept by money house from the coinsWhen it comes to estate planning, many people think that simple is better and they might be under the assumption that a will is all they need. However, people might be under the impression that wills can avoid problems on death because the will outlines who gets the assets. However, what many people don’t realize is that wills only govern the assets that go through a court proceeding referred to as probate.

There are some assets that are not included in the probate process. This is the distinguishing factor between non-probate assets and probate assets. Your wills govern probate assets but the will does not govern any assets outside of probate. The title to the assets or the way in which you own them determines whether or not probate is required.

A probate proceeding in Massachusetts can include paying off any taxes and debts, appraising the property and distributing any remaining assets along with the will’s provisions. In the event that there is no will, the proceeding is called administration proceeding and state law determines how your property is distributed. Probate assets are those items that are in your name alone when you pass away. If it’s not quite clear who the beneficiary is, the asset will go through the probate process. The court has to first determine that the will is valid in order to do this.  Depending on circumstances, the probate process  may be costly. Typical charges to the estate are legal fees, court costs and executor commissions. If there is a will contest or heirs can not be found, the cost of probate increases significantly.
Non-probate assets are the result of forms you signed and filed with different companies. First of all, your life insurance policy, bank account, annuity or IRA will have a beneficiary designation – and alternate beneficiary – that you signed and filed with the company. Assets that you own jointly with the right of survivorship mean that when you pass away, the asset transfers directly to the beneficiary you have named. Consult with an experienced Massachusetts estate planning attorney to learn more about the difference between probate and nonprobate assets, and whether nonprobate assets make sense for your planning.

For Some Families, Estate Planning Is People Planning

Some of the best sitcom episodes are those in which the protagonist family goes on vacation. Invariably, they mess up. Tickets are left, bags are lost, plans derail, and tempers fly off the handle.

That’s how it goes, isn’t it? Nobody’s family is fully functional 100% of the time, and life’s “big events” only seem to turn up the pressure.

Along those same lines, there’s a new editorial in Forbes, arguing that people are the most important ingredients in your estate plan — and the author isn’t talking about beneficiaries. Instead, it’s the people you leave in charge who might make a mess.

“Estate planning is less about having the proper paperwork in place and more about managing the people in your life,” writes Charles Sizemore, a chief investment officer who decided to give all his documents to his own estate planning attorney for safekeeping.

“The fact is,” he says, “you can do all the ‘correct’ paperwork and have an airtight will and testament in place, but it won’t matter if your spouse or heirs can’t remember where it is or what to do with it.”

That’s a bigger problem for some families than others. Which kind is yours? The vacation comparison is a useful indicator. Are you a smooth-sailing clan? Or is the Home Alone airport frenzy an annual reenactment for you?

If your immediate loved ones aren’t always the most organized or cool-headed in trying times, you might want to look for a more suitable party to serve as your personal representative or even as a “documents keeper.” Then, as Sizemore suggests, give everybody else in the family that person’s business card.

Who should you pick? There’s no right answer. It doesn’t have to be a family member, nor does it have to be your estate planning attorney. In the right circumstances, I can provide that service for some of my clients, but I also help people strategically select other third parties who happen to make sense in their situations. Give me a call and we can talk about the right choice for yours.

Preparing to Die: Why the Will Is Just the Beginning

“Prepare to die” sounds like something a super-villain says to a caped hero in a Hollywood blockbuster. Certainly, it’s not a phrase any of us want to hear today.

But all of us will pass away someday, and when we do, we’ll leave people we love behind. They’ll have a lot to take care of when that happens. Attending to an estate is a difficult thing to ask of a family when they’re grieving, but it’s something that must be done.

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“Preparing for death” in the legal sense, then, isn’t nearly as sinister as it sounds. In fact — contrary to the inflection with which The Joker might say it to Batman, for example — it really is an act of compassion and care for those who’ll inherit a substantial burden after we leave.

The New York Times recently ran an article about the surprising number of tasks that must be dealt with in today’s estate plans. It’s so much more than just a will these days. Trusts, health care directives, burial instructions, powers of attorney, lists of online account passwords… the list goes on and on.

As a Winchester estate planning attorney, I think one of the ways I can be most helpful to my clients is staying up to date on all the changes and trends in end-of-life preparations.

The law in this area changes all the time, and as technology and society evolve, our estate documents must also change to reflect those developments. Otherwise, we risk ineffective or unintended results.

“Preparing to die” is an understandably uncomfortable thing. I’m here to take care of those things for my clients so they can focus on living their lives instead. If you need help or advice with your will or any other estate documents, please feel free to call my office today. We can talk about what you might need to bring your future plans up to date.