Who Should (and Shouldn’t) Take Steps To Avoid Probate?

Who Should (and Shouldn’t) Take Steps To Avoid Probate?


Paul Rabalais Hey, so this video is about who should or shouldn’t take the necessary steps to avoid probate I’m Paul Rabelais I’m an estate planning attorney I’m here in Louisiana help people all around South Louisiana and even help a few folks from North Louisiana, but this video is You know a lot is discussed about it This topic of whether people should have a will or trust whether they should take the steps necessary to avoid probate or not probate so Listen you know take a little bit closer look at that This issue gets clouded sometimes by some people who are more biased give you a couple examples We’ve seen in the last you know decade or two how some people in the financial services industry Really pushed a living trust and even sell the living trust so they can discover all of the assets that somebody owns Because when you have a trust those assets need to be retitled the more the financial adviser finds out about what you own the more they can Hone in on selling annuities or life insurance to you. That’s not the case with every person in the financial services industry Just like the legal profession. There’s a lot of really good people and then there’s the bad ones But we’ve seen a lot of people have advocate living trusts for the wrong reasons on The other side we see sometimes people in my profession the legal profession Say oh no need to have a living trust because the probate is not that bad most of those words are heard from people who make a living taking families through the probate process and So they say no problem probate only costs X But I’ve seen those same lawyers take families through a probate process and incur costs and fees in excess of 20 or 30 times X So it gets a little clouded there, so let’s just try to be objective I’ve come up with seven reasons why people should take the steps necessary to avoid probate Three reasons why they shouldn’t real quick I’ve done a podcast on this particular topic check that out as planning with Paul Rabelais is the name of the podcast is 27? Minutes long this video is designed to be brief real quick if you own property in multiple states the Louisiana probate doesn’t transfer a property you own in other states if You own all that property in your name your family’s gonna? Go have to go through multiple probates multiple states multiple sets of lawyers kind of a nightmare Put all those assets in a trust avoid the probates everywhere Sucking not really a probate issue, but a lot of people have found that You know some people say. I’ll just I’m gonna keep my assets in my name, and if I become incapacitated I got that covered. I mean my son as my power of attorney. He can do everything for me Well a power attorney is only as effective as the third party is willing to honor it a lot of financial Institutions have said we’re not gonna honor The power of attorney that son is presenting to us Because it’s too old it doesn’t have the right word in the title it doesn’t have the right whatever They don’t want to work with two people so because of that some third parties don’t honor powers of attorney, but if you have a trust I’ve never seen a circumstance where when properly done the the successor trustee upon the initial trustees incapacity can step right in and make transactions So be wary powers of attorney are only effective as effective as the third party is willing to honor it We got to do something about that the third reason is people who just want to reduce the post-death cost and trouble so Just finished working with a gentleman and his wife And he realized that if his estate went through probate with the statutory two and a half percent executor C That’s not even getting getting into the attorney costs. You know there would be you know a six-figure executor sofy under that statutory executor see that that takes place when there’s a succession or a probate so he designated a trust a CPA family member who you know says it’s gonna be easy and it’s gonna be just a fraction of the cost So some people want to eliminate all the executor fee attorney fee court fee stuff That’s required and so they see the financial benefit there for if there’s the potential for conflict Maybe dad has several children they don’t get along It’s not a fair statement to say a will can be contested in a trust can’t Because if you do it wrong or you’re you don’t have the required mental capacity Or if you’re unduly influenced by someone All of those things if done incorrectly can be challenged, but generally with a trust the settlement goes quicker all of the Participants don’t have to be involved in the trust settlement They just have to receive the trust assets, or if you have a probate you know everybody’s a participant They’re having to sign off on different things, and there’s the potential for you know unnecessary delay Some people want to have a truss because they just want to plan ahead You know we see a lot of people they have children out-of-state Children raising families they just want to do as much as they can ahead of time To make it easier for their survivors those people typically choose to trust Because they you know just want to plan ahead and make it easier had a gentleman. Tell me once he owned a business he said every day that goes by after I die and my business is gonna be worth less because My business rely on me so that relies on me that business is gonna need to be sold immediately Having that business in a trust allows the successor trustee to continue transacting sell that business Immediately some people who own a business want their business in their trust to avoid all that delay that goes when the courts have to oversee that and Then maybe just the final reason is some people just want to make it easier They’re like. I want to make it as easy as I can on my wife She’s not real savvy with the financial stuff And if I can arrange it where she doesn’t have to do any throw anything or deal with lawyers and courts after I pass away I want to make it as easy as I can on her so those people often You know set up the trust to avoid the probate process Three reasons why you may not need to do that one in Louisiana We have something called a small succession affidavit procedure if what you own is worth out less than one hundred and twenty five thousand dollars equal to or less really then and if you’re comfortable with the way our Laws say things must go if you die without a will then and it’s Dangerous to say this don’t have anything in place don’t need a trust because your estate can pass under this outside of the formal probate proceeding small succession affidavit procedure and Your children for example will really almost immediately get what you have So less than a hundred and twenty five thousand dollars and comfortable with the intestate laws if you have a will this small succession affidavit Proceed procedure is not available. I’ve done another video on that Also, if there’s not gonna be any probate anyway Then no need to form a trust to eliminate probate and probate is not going to be necessary if for example You don’t own a home. You don’t own any real estate Maybe all you own is your IRA where you’ve named beneficiaries your bank account where you’ve arranged it by Adding an adult child as a signer Filling out a payable-on-death Designation at the bank so that people have access to it when you pass away so if you don’t have any probate assets, no need to set up a trust to eliminate the probate and then the third reason why it may not be necessary to do this is Some people kind of funny come in and they just say I don’t care. I’ll be dead and So you know I just want to make it as simple as possible on me I want to leave everything in my name sure I’ll do a will Yes, when I died whoever I’m leaving these things to they’ll have to go through probate. I don’t care I’ll be dead want to make it as simple as possible on me. I don’t care how difficult It’s gonna be for them so there you have it a few pros and cons of you know why you should why you? Shouldn’t I mentioned it a few minutes ago. If you want to know more check out our podcast estate planning with Paul Rabelais You’ll get a much longer version of this discussion. It’s about twenty seven minutes and We go through it and more death depth There you go, hope this helps Make sure you take care of your business the worst thing to do is just ignore it get yourself with the right estate planning a turn who can Walk you through things get it right the first time Go Tigers. Have a great day

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