Probate administration is the legal process through which a person’s assets are distributed after their death. These assets can include money/accounts, personal possessions, real estate or any other items of value. The probate must also account for debts. During the probate process, the administrator or executor creates an inventory of these assets, pays off debts and then distributes what’s left after paying those debts to a person’s devisees and legatees in accordance with the deceased’s will (if one exists), or to their heirs at law if there is no will.
If you’ve been strategic with your estate planning, not all of your assets will have to go through the probate process. There are a number of types of “non-probate assets” that will allow you to bypass the process in part or in full.
Here are just a few reasons why this is a good strategy to consider in your estate planning.
- The process can drag on and on: Probate can be an incredibly time-consuming process. Depending on the complexity of the estate, it could range from months to years before it’s complete. The longer the process takes, the longer the devisees and legatees or heirs have to wait before they can receive their inheritance.
- It’s a public process: Because probate is judicially supervised, all of the information and documents included in that process are entered into public record. This means all of the assets and debts can be reviewed in the public record. For some people this isn’t a big deal, but others value their privacy.
- It can cost your estate a lot of money: The costs of the probate administration process vary depending on the complexity of the estate, but it can, in some circumstances, become very expensive. These include legal fees, court fees, publishing/notice fees, and administrator/executor fees. There are advantages to avoiding the probate process, or at least significantly cutting down on the percentage of your estate that is subjected to the process.
A typical way to avoid probate is to create a living trust and place assets into that trust. Such a trust allows you to maintain privacy as you pass your assets on to your heirs while also incurring as little expense as possible.
A trust differs from a will in that a will simply distributes assets after your death, whereas a living trust holds those assets “in trust” to be managed by a trustee on behalf of your beneficiaries during your life and provides for how they will be distributed after your death. Because the property and assets are held in the trust, they can bypass the probate process.
For more information about probate avoidance methods and the benefits of employing them in your estate plan, contact one of BoltNagi PC’s experienced estate planning lawyers in the U.S. Virgin Islands.
Steven K. Hardy, Esq. is Chair of the Corporate, Tax and Estate Planning Practice Group at BoltNagi PC, a full service business law firm located on St. Thomas, U.S. Virgin Islands.