Many people are unaware of how important it is to begin an estate plan early in life and update it often. Estate planning can make many people uncomfortable or may simply seem unnecessary to those who do not have significant wealth. However, comprehensive estate planning has many benefits, including protecting your loved ones and avoiding probate court. An estate planning attorney in Lincoln can help you understand the unique benefits an estate plan may offer you.
Understanding the Probate Process in Lincoln
Probate court is where the assets in your estate are managed by the state if you die with only a will or with no will at all. If you do not take steps to keep your estate out of probate, it will go through the probate process.
During the probate process, the court will either appoint an executor to the deceased’s estate or pass the estate to the executor named in the will. The court must also determine if any existing will is legally valid and whether it will be upheld in court. If the will is valid, the executor will pay the debts of the estate and distribute the assets to the heirs named in the will. If the will is invalid, or there was no will, the court will pay the debts and distribute the assets according to intestate succession laws.
Why Do You Want to Avoid Probate?
Avoiding probate can save your loved ones, family members, and beneficiaries significant time, stress, and money. Probate comes with significant costs, which can impact the financial benefits your loved ones receive from your estate. Nebraska carries an inheritance tax when the estate goes through probate, and your estate may also face federal estate taxes. Your loved ones may also have to shoulder court costs, representation fees, and the fees for the estate’s representative.
Probate may also take as long as several months or over a year, during which time your beneficiaries must wait to receive the assets you left them. Probate is also a public process, meaning all the assets in your estate and the individuals who receive those assets are available on public record.
In addition to the time and money lost in probate, the process is very emotionally straining and exhausting for your loved ones and beneficiaries. They have just lost a loved one, and there is a very short window to file for probate. Being in court is not easy and does not give your loved ones the time they need to grieve. The length and costs of the process can worsen this stress.
Small estates can sometimes avoid probate if they meet the requirements, but this is not a guarantee. The only way to be sure you avoid probate is to create a detailed and comprehensive estate plan with an attorney that is straightforward and legally valid.
Creating a Comprehensive Estate Plan
The most effective way to avoid probate court and its stressors is to create a comprehensive estate plan, complete with a trust or several types of trusts. An estate passes through probate court when the assets within have no owner and must be divided by the state.
A trust prevents the assets from ever entering state ownership. Instead, the trust holds assets in a third-party legal entity, and the ownership of the entity passes upon your death from you, the trustor and trustee, to the successor trustee you named. Trusts are still subject to specific taxes and are not automatically exempt from creditor claims, but they do save you and your loved ones money by avoiding probate.
Q: How Do You Avoid Probate in Nebraska?
A: Typically, the ideal way to avoid the probate process is to place your assets into one or more trusts in Nebraska. A trust is a legal entity, meaning that the assets you list in the trust do not fall under state jurisdiction. Instead, they pass to the trustee successor, who you name.
Your trust can name beneficiaries to assets, the trustee, a successor trustee, and specific guidelines for passing assets to beneficiaries. A revocable trust will enable you to retain control over the assets and still keep the assets in the trust’s ownership when you die. An irrevocable trust affords you less control over the assets placed in it but can avoid certain taxes during your lifetime.
Q: What Are the Disadvantages of the Probate Process?
A: The process of probate is long, costly, and stressful. If your estate goes through probate, your loved ones will have to manage this process shortly after losing you. Probate includes court costs, fees for executors and attorney representation, and potentially state or federal taxes on the estate’s contents. This means your beneficiaries, whom you want to earn the financial benefits of your estate, will have those benefits cut significantly by these costs.
Probate can also take months or years to resolve, depending on the complexity of your assets and whether there are any disputes or contests. During this time, your beneficiaries cannot access the assets you have left to them.
Q: What Triggers Probate in Nebraska?
A: Probate in Nebraska occurs when an individual dies and has only a will rather than a comprehensive estate plan or has no will at all. Most of a person’s individual and personal assets in their estate are subject to probate. There are some situations where a low-value estate qualifies for summary probate or a small estate affidavit, meaning probate can be avoided or shortened.
The only way to ascertain your estate avoids probate is to create a comprehensive estate plan, typically one that includes trusts, and ensure the estate plan is legally valid and enforceable.
Q: Do You Have to Go Through Probate if You Have a Will in Nebraska?
A: In most cases, yes, your estate goes through probate court if you have a will in Nebraska. Smaller estates may qualify for summary probate, which is a simplified form of probate. Other estates qualify for a small estate affidavit, which can waive the probate process entirely if the estate meets certain assets and debt criteria. However, without these exceptions, any estate with or without a will goes through probate. Only thorough estate planning can help your estate avoid probate.
Protect Your Interests With Stange Law Firm
If you want to begin planning to protect yourself, your estate, and your loved ones, the estate planning attorneys at Stange Law Firm can help. Contact us today to see how we can help you tailor a plan to your needs.