How to Ensure that Your Family’s Finances Won’t Suffer When You Pass Away
Many of us worry about what will happen to our families should we unexpectedly pass away. Some of us are also worried about our loved ones paying our bills, handling the funeral and other financial obligations that we leave behind. Therefore, I want to tell you a story about Elizabeth, a client of ours that we met about six months ago.
About seven years ago, Elizabeth’s husband of 40 years, John, passed away. Unfortunately, Elizabeth and John, didn’t do any planning. Together they owned a home, two bank accounts totaling $50,000.00, an IRA where Elizabeth was named as the beneficiary, an annuity with a value of $100,000.00, an investment account with $250,000.00, and a modest amount of personal property.
When John passed away, Elizabeth had to go to probate court because John died without a will. Elizabeth had to go to court, be named as the administrator, file a detailed list of all the assets and debts that are part of John’s estate, pay all the valid debts and claims that were filed against the estate, and obtain an order from the court closing the estate. In all, this process took 10 months and cost Elizabeth approximately $12,500 in attorney’s fees and various court costs.
As you can expect, Elizabeth never would have guessed it would have cost this much and caused her so much stress, just to settle her husband’s estate.
Preparing for the Future
Because Elizabeth had gone through this process when her husband died, she did not want her three children to go through the same stressful situation. Therefore, Elizabeth decided to set up a Revocable Living Trust. This trust said that Elizabeth would remain in complete control of all her assets, property, and financial accounts during her lifetime. This meant she could buy and sell property and spend money freely without any restriction or interruption. However, when Elizabeth passes away all her assets pass immediately to her three children, outside of probate.
Contrary to the 10 months it took to settle John’s estate, Elizabeth’s will be settled in days. Her children will not have to go through probate, will not have to spend thousands of dollars in costs and attorney’s fees, and they will not have their family’s personal financial matters exposed in the public court system. Elizabeth now has peace of mind that everything will be taken care of and handled smoothly for her children when she passes away.
For More Information
If you have questions or concerns regarding the proper comprehensive estate plan to put in place for your family to ensure a smooth transition of your wealth to the next generation, then please contact our office for a complimentary visit so that we can discuss your estate planning needs.
We look forward to hearing from you!