An estate plan typically accomplished more than one goal. Distributing your estate assets upon your death is certainly one of them; however, providing for family and loved ones left behind may be even more important. If you are concerned about providing for your loved ones in the event of your death then you should ask yourself if they will have access to immediate funds if you die.
Most estates are required to go through a legal process known as probate when the estate owner dies. Probate can take months, even years, to complete. In the meantime, estate assets are usually held up in court, inaccessible to the intended beneficiaries. A bank account with $1 million in it does not do the beneficiary of the account any good if he or she cannot access it to pay the mortgage or the electric bill.
The good news is that with careful planning there are a number of ways you can ensure that assets avoid probate and pass directly to the intended beneficiary. Life insurance proceeds, for instance, do not go through probate in most cases. Likewise, assets held in a living trust can be distributed without the need to wait for probate. Even that bank account could be immediately accessible if you titled it as a “payable on death” account or something similar that allows the beneficiary immediate access to the account upon your death.
Be sure to discuss your concerns with your estate planning attorney when you create your estate plan to make sure your loved ones are protected from the moment of your death.
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