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Death
does not always forewarn. It can strike unexpectedly and,
when it does, the business affairs of the deceased may or
may not be in order. Once the immediate responsibilities following
a death have been fulfilled, a determination must be made
as to the existence of a will. Depending on the situation,
the probate process may then begin.
Probate is the act or process that transfers legal title of
property from the estate of the person who has died. It also
includes the act of proving to the court that the instrument
presented is the last valid will of the deceased person. The
probate process begins when the original will is deposited
with the probate court of the county where the decedent resided.
Probate
assets include the property that passes under and is subject
to the terms of the will. If no will exists, the property
is subject to administration by the court according to state
rules. Once the will is validated, the executor or administrator
is sworn in and formally appointed.
There are advantages and disadvantages to the probate process.
Consideration of your unique situation and consultation with
your financial advisor and attorney can help you make the
best decision.
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Advantages
of Probate
- The will
is validated
- The actions
of the executor are supervised
- Proof of
legal title to real property is established
- A guardian
is formally appointed to a minor, if stipulated
- Inventory
and valuation of the assets and liabilities are carried out
- Time frame
is set for creditors’ claims
Disadvantages
of Probate
- Lack of privacy,
meaning that the will itself, beneficiary information, and creditors’
claims are public record
- Property
distribution may be time-consuming
- Inflexibility
because asset distribution must be carried out according to state
law
- Higher administration
costs to probate the will
- Executor
commissions and attorney fees are generated
Methods to
Avoid Probate
- Attach a
beneficiary designation to 401(k) s, 403(b) s, IRAs, Roth IRAs,
annuities, and life insurance. Upon the death of an individual,
these assets pass directly to the named beneficiary, thus avoiding
probate.
- As part of
your estate plan, establish a totten trust, or a Transfer On Death
Designation (T.O.D.). This designation allows you to assign a
beneficiary to a bank/checking account or non-qualified personal
account. For example, you may own a brokerage account in just
your name. Brokerage accounts do not offer a beneficiary designation.
Establishing a T.O.D. allows the assets to transfer directly to
the named individual, thereby avoiding probate.
- Make sure
that you have an updated, current will that clearly outlines your
wishes for the distribution of your assets.
Estate planning
is not only for the wealthy. A comprehensive plan containing updated
information will help facilitate the intended and orderly disposition
of assets at death. Consult your attorney and financial advisor
to ensure that you have the right estate plan in place for your
objectives.
 Note
to Our Clients
LPL Account View will now download to Quicken
Linsco Private
Ledger has provided a way for you to export account information
into your personal Quicken programs.
The new LPL
Account View option gives us the ability to turn on access to Quicken
Downloads for all of our clients. Once selected, a "Download
to Quicken" icon will appear on LPL Account View screens allowing
you to export your information anytime into your personal Quicken
programs.
Remember that
the introduction of any new technology can be challenging in terms
of education and support for its users. To prepare for this new
option, Linsco Private Ledger has arranged a 24/7 phone support
for download issues and will post a tutorial for you on LPL Account
View screens. For any questions you may have, the support numbers
are as follows:
(800) 877-7210
x6357 or (520) 618-7140.
Source: The
Ledger
This article is for informational purposes
only and not intended as tax advice. Consult your tax advisor to
determine what is appropriate for your situation.
Past performance is no guarantee of future results.
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The Retirement Planning and Wealth Preservation Specialists Since
1972
610 Smithfield Street, Suite 400, Pittsburgh, PA 15222
Phone 412.227.3200, Fax 412.227.3210, Toll Free 1.800.900.4492
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©2004 The Fragasso Group, Inc., All Rights
Reserved
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