By deciding not to complete any planning for your life and eventual death, it might be because you are too busy, do not understand the importance of such planning or think that you can do it later. You may think that it is not a big deal to have the court involved in all of your personal affairs. Perhaps you don’t know the disadvantages of court interference or have first-hand experience of what can happen in the event of incapacity or death of a family member without a properly drafted and comprehensive legal life planning “aka estate planning.”
However, if you feel that the matters of your affairs should be kept private, prefer that someone you designated make decisions in the event of your inability without court interference, and that your assets should be distributed according to your wishes privately without court fees, you are in luck. Fortunately, all it takes is a proactive approach and a small investment. By acting now, you will save an enormous amount of stress and money and give you the peace of mind to live the life you desire knowing you have security for the future.
With that said, let’s dive in to the basics of Government Interference in the event of incapacity and at death. The two of the most common situations in which the court becomes involved in your estate are conservatorship/guardianship and probate:
Guardianship and Conservatorship
A person is declared incapacitated if they are unable to effectively handle their property or financial affairs documents. In their estate plan they can direct a trusted person to carry out their wishes during such time of incapacity. So what happens if no such documents have been drafted? Then their business becomes the government’s business, too. A court proceeding called guardianship or conservatorship (also known as “living probate”) will be held to appoint guardians and conservators to manage the affairs of the incapacitated person. Then, the guardian/conservator may need to post a bond and then comply with all of the demanding court requirements. Most importantly, the decisions of the guardian/conservator may be contrary to what you had ultimately wanted for yourself and your finances.
When an estate goes through probate, the court oversees the gathering of the probate assets, payment of any outstanding debts, determining whether a will is valid, and who the deceased’s heirs are. The proceedings ultimately determine who should receive the assets that are left after payment of debts, taxes, and costs. While this may sound straight-forward, it generally is not – to the contrary, it is often time-consuming and expensive. Also, the process of probate of public record and done for the benefit of creditors by ensuring the estate has paid its debts prior to any distributions to beneficiaries, should there be any money left after creditors are paid. If someone had a will, the Executor named may need to post Bond, which requires good credit. If that person does not have a good credit history, the Judge may not allow that person to serve and will appoint a Personal Representative, who could be a stranger to the decedent and could make decisions that are contrary to your wishes.
Staying out of Court
Probate avoidance – In order to avoid guardianship, conservatorship, and probate, you can work with me to keep your affairs out of court entirely.
- Powers of attorney
Agents or attorneys-in-fact are the individuals or entities you appoint to make decisions for you if you are unable due to incapacity. You designate agents or attorneys-in-fact in a document known as a Power of Attorney. A Durable Power of Attorney is a document that continues in validity after the incapacity of the maker of the document (i.e. “durable” against incapacity). Since a Durable Power of Attorney continues in validity, a Durable Power of Attorney can help bypass the need for court-appointed guardianship or conservatorship because the Agent has been nominated to make decisions, eliminating the need for a Judge.
Trusts are agreements that hold some or all of your assets. An individual or a corporate entity that you designate as your Successor Trustee will manage the assets inside of your Trust if and when you become incapacitated. Unlike wills, Trusts do not go through probate at your death because the agreement has spelled out exactly what will happen upon your death, bypassing the need for a Probate proceeding. There are several ways to structure a Living Trust and I can help you decide exactly how your Trust will be structured and how your estate will be planned.
By setting up and completely funding a Revocable Living Trust, you can accomplish two important things. First, you can rest assured that your assets will be distributed to your chosen beneficiaries and won’t go through probate upon your death. Second, you also retain the ability to change or cancel the arrangement during your lifetime enabling you to adjust your plan as your financial or family circumstances change.
Make sure your estate plan is solid and complete
Deciding on appropriate powers of attorney and drafting a Revocable Living Trust are just two of the many steps we can take together to keep your affairs free from court interference at incapacity and at death. With a solid estate plan put into place with my help, you can take comfort knowing that everything you’ve worked so hard to build and maintain will be passed along to only the people who matter most. Give me a call today to learn more about keeping your estate plan private and out of the Court’s hands.