We recently reported about the closing of the intestate estate of the musical artist Prince. He passed away in 2016, and the estate was stalled in probate for six years in large part because of the fact that there was a dispute about the degree of estate tax responsibility.
You may have read about the estate planning decisions of other celebrities over the years. Why does the press have access to this information? If it is disclosed to them, can anyone find out the details about any estate?
The thought of this can be disconcerting when you apply it to the administration of your estate. In this post, we will look at the matter of confidentiality when an estate is being administered.
The Probate Process
If you use a will as your asset transfer vehicle, you designate an executor in the document that will complete the hands-on administration tasks after your passing. They cannot conduct the business of the estate independently without court supervision.
The will is admitted to probate, and the executor must adhere to the statutes that apply to the administration of probate estates. While probate is underway, creditors will be notified, and they are given time to come forward seeking payment.
Final taxes are part of the equation as well, and the executor will obtain an Employer Identification Number from the IRS so they can establish an estate bank account. The executor will also identify and inventory the assets and prepare them for distribution.
There is a proving of the will during probate, so the court will determine if the document is valid. Anyone that wants to challenge the terms can come forward and make a case while the estate is being probated.
This is a public proceeding, so the details are available to anyone that has an interest in obtaining them. As a result, privacy is lost, and your final decisions are not kept confidential if you use a will to state your final wishes.
You can maintain your privacy if you facilitate the administration of your estate outside of probate. If you use a revocable living trust instead of a will as your asset transfer device, you will accomplish this objective.
A lot of people shy away from the idea of creating trusts because they think that you lose control of the assets that you transfer to a trust. This is not the case when it comes to the revocable living trust, because you will be the trustee while you are living, and you will maintain access.
When you establish the trust, you name a successor trustee to administer the trust after you are gone. This can be someone that you are personally acquainted with, or you can use a professional fiduciary such as a trust company or the trust department of a bank.
After your passing, the trustee will distribute assets to the beneficiaries, and the probate court will not be involved. Since probate will not enter the picture, the details will be kept confidential.
Privacy protection is a major positive, but there are other benefits to be gained if you utilize a revocable living trust as the centerpiece of your estate plan. We will look at them in a future post.
Attend a Complimentary Seminar!
You are here because you are looking for information about estate planning, and we have some fantastic opportunities coming up in the near future. We are conducting a series of seminars at desirable locations in our service areas, and this is the ideal way to connect with our firm.
We offer the sessions at no cost, and you will learn a lot if you join us. You can check out the dates if you visit our seminar schedule page, and we ask that you register in advance for the session you would like to attend.
Need Help Now?
If you have already decided that it is time to work with a Glastonbury, CT estate planning lawyer to establish your plan, we are here to help. You can send us a message to request a consultation appointment, we can be reached by phone at 860-548-1000.
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