Stautz Law

Tag: Probate Avoidance

  • Saving Money with Revocable Trusts

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    Hi, it’s Andy Stautz at Stautz Law. Today we’re back talking about estate planning. And my topic for today is why estate planning is worth it. In other words, how you can save lots of money with a revocable trust.  

    Is Getting a Trust Done Worth It?

    Now. You know. I think I provide overwhelming value to my clients. I think doing an estate plan is always worth it. UM. Because. The comparison between the upfront cost of doing an estate plan. And the back end savings is huge. And every time.  

    So today we’re just doing a simple example. I’m not going to go into the whole thing. I’m just going to point out that, you know, a will based plan is kind of the the cheapest, most basic option. A step up from that and what I recommend for lots of my clients is a revocable trust based plan.  

    Now. Writing a trust is more difficult. It’s more expensive, and there’s a little bit more administrative complexity. But it saves money in the long run. And the math is really simple.  

    How a Revocable Trust Saves on Probate Costs

    You know, setting up the trust costs a little over $3000. But a trust avoids probate, which a will based plan does not – and which “no planning at all” does not.  

    Estimating Indiana Probate Costs without a Trust

    Well, guess what? Probate administration in Indiana right now pretty much starts at $3000. That’s for a simple, you know, unsupervised, uncontested estate. That’s just how long it takes to get through the court process. 

    And that’s a minimum. So it goes up from there. So if someone comes out of the woodwork and challenges the will; if you’ve got a bunch of creditors that you didn’t know about; You know if, uh, you need it supervised for some reason… You know, all the complexities add up.  

    So. The fees I charge for my trust-based planning are…. intended to demonstrate overwhelming value. It’s going to save you the minimum financial cost of going through probate, not to mention the risk of more expense, the risk of conflict. And you know, the emotional strain of having to deal with lawyers and court while you’re grieving.  

    Is an Indiana Estate Plan Worth the Cost? How to Decide

    I think the comparison’s a no brainer. You know, if you can afford it, paying to have it done upfront is definitely going to save you money. It’s also going to make your life easier. So that’s why your financial planner. You know, advises you to get an estate plan. That’s why I try to get my clients to, like, come on, sit down and do your estate plan. Because it’s just … it’s the responsible thing to do. It’s good for you.  

    And that’s why I love my job because. I really get to help clients out. I get to deliver a product that is, you know, that is great. It’s a great deal. So that’s my point for today. I’m sure we’ll talk about it in the future.  

    You can look around on the website, you can book an appointment online or you can give me a call if you want to talk. And we’ll see what plan is right for you. Thanks and bye.

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  • Does a House Need to Go Through Probate?

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    Good morning, folks. We’re back. It’s Andy Stautz at Stautz Law and we are talking about basic estate planning. And probate. Today we’re talking about a very common scenario which is inheriting a house.  

    Does a House Need to Go Through Probate?

    So I was asked the other day, “Ohh, well, my parents’ house is coming to me in the will. But I’m not ready to open a probate estate yet. Can I sell the house right now?”  

    And the answer is no, you can’t. Not if there wasn’t planning done in advance.  

    Probate Avoidance Planning for a House

    So if you plan in advance, you can put a house in a trust so that it passes automatically outside of probate, or you can record a transfer on death deed. Which is another way to transfer house outside of probate: transfer on death deed, which I’ve talked about elsewhere. It’s like a beneficiary designation on a retirement account. It just works.  

    So that and the trust are kind of two main planning techniques.  

    Indiana Probate Procedure for Houses

    But of course once the the homeowner has has passed, well, it’s too late to do any advance planning. So now you’re dealing with… You’re dealing with a house that needs to pass the title in an orderly way, and that’s what probate is, and that’s what probate’s for. 

    Now, Indiana has a small estate procedure that is much simplified. But the limit for that is $100,000 at the moment. It was lower before. So if there’s any significant equity in the house, you can’t use the affidavit procedure to transfer a house title.

    [EDIT: For completeness’ sake, I should have mentioned that Indiana does allow a “devolution affidavit,” which can provide evidence of a transferred house title, even above the small-estate limit and even without probate. The use of devolution affidavits is controversial, and is beyond the scope of this introductory talk.]

    You probably don’t want to anyway, because you might have problems down the road selling the house, clearing a title check at sale, getting a mortgage against it if you want one.  

    So really what you need to do is open a probate estate: that can be unsupervised, maybe, you know depending on how many beneficiaries there are, or the status of the rest of the estate, whether there is a will that provides for unsupervised administration….  

    But the minimum cost you’re looking at there is probably, uh, $3000 and up for a probate administration, and that’s what you have to do before you can… Before you can sell the house. Right? you have to get title to the house before you can sell it.  

    So you can’t just… You can’t just take the house. Say, oh, well, it’s going to be mine and then sell it right away. So that’s a real speed bump for a lot of people. And something you should plan ahead for.  

    You know, if you want your heirs and beneficiaries to be able to get rid of the house right away. Or sell the house. If you want to make it easy on them, you need to do some advance planning.  

    If you want to make it easy on them, you need to do some advance planning

    And on the flip side, if you are probably inheriting a house. You know you need to, you need to be prepared to go through probate, which is going to be an expense. And it’s going to be a delay. So it’s probably going to be a few months before you’re ready to actually sell that house. So that’s just kind of how it works.  

    It can get more complicated once you’re in probate, if you know that if there’s a contest, if for some reason it’s a supervised administration. And if it’s a supervised administration, you need to go to the court and ask permission to sell it and and, you know, get permission to say, OK, we think this is a fair market value sale, whatever. UM. So it can be really tedious a 

    Benefits of Estate Planning for Probate Avoidance

    And that’s why a lot of my estate plans when people come to me ahead of time, we were able to plan around that and make sure we’re not dealing with probate. That’s why probate avoidance is is worth the upfront cost: because it saves you, after death, you know, time cost, legal fee cost, risk of conflict or contest amongst beneficiaries and heirs.  

    Planning looks expensive up front, but it avoids problems later.  

    If you didn’t do the planning and you’ve got if you’ve got a house that you need to do something with? Yep, a probate administration is going to be the way. You know. I’m happy to handle that for people, too, it’s just kind of two different roads and you got to decide which one you want to be on. 

    So. I hope that clarifies the probate transfer of houses. If you want to talk about that topic or any other estate planning probate topic with me. You can book online here at the website or give me a call.  

    Thanks for watching! Bye.

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  • How Does a Revocable Trust Work?

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    Hi, it’s Andy Stautz with Stautz Law. Today we’re talking about revocable living trusts. This is a huge planning tool for the most typical clients.  

    But there are lots of questions. What is a revocable living trust? How does it work? Do I need one? And it’s worth explaining the basics here. So you kind of know what you’re getting into.  

    A revocable trust is just a trust that can be revoked: revoke-able trust. Umm, it’s a living trust because you make it while you’re alive and you can change it while you’re alive. And a trust is a set of instructions for how someone else [or yourself!], a trustee, should manage the property in trust.  

    With a revocable living trust you make it yourself. And you make yourself the trustee and you make yourself the lifetime beneficiary. So you’ve created this legal structure that kind of redefines your role relative to your property.  

    But nothing else changes. It’s a legal fiction in that regard.  

    So if you create a revocable trust, you take your property and you change the title, you change who owns it in the eyes of the law from “you, yourself” to “the trust and you as trustee of your own trust.” And that doesn’t make any difference while you’re alive. If you, assuming you, name yourself as the life beneficiary, you know, you still get to control what you do with the property. Everything’s the same.  

    Except when you die, because the property is in trust rather than owned in your own name, it goes outside of probate. It goes according to the instructions in the trust instrument. 

    So as a planning device, it’s great, right? Your setting the trust up in advance lets you use the property just the same as if you had never done it. Until time of death, when all of a sudden you get the benefits of, you know, naming other beneficiaries, naming a successor trustee, right? Umm. And that can be as simple or as complicated as you want.  

    It can be as simple as OK. My trust is mine while I’m alive. When I die, it distributes all the assets to beneficiaries A, B, and C. My children. In which case it’s basically a will. Except no probate. It costs some money to set up, but it saves you expenses on the back end and makes life easier for your beneficiaries.  

    Or it can be more complicated. You can set up a revocable trust that will have a continued life. That will stick around. Maybe you’ve got minor children or minor grandchildren. And you don’t want the distribution of trust assets to happen all at once. You can stage it. You can add life milestones. You know: when they graduate college, when they turn 30. Whatever else. Powerful planning tool.  

    It depends on this planning ahead though. You have to set up the trust during your lifetime. You have to move the assets into the trust so that the legal fiction works. But it doesn’t change anything about your lifetime use of the property.  

    So those are the basics. Obviously, whether it’s right for you or what exactly your revocable trust should contain are personal questions: that’s legal advice that you need to come in for a planning meeting for. And that’s exactly what we’ll do: Talk about your situation. See what you need and come up with the best plan for your family, your property.  

    You can book that planning meeting online. You can give me a call. I look forward to working with you soon. Thanks for watching!

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  • “Does a Will Avoid Probate?” Answered!

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    Hi, it’s Andy Stautz with Stautz Law. Today I’m back to answer another common estate planning question and that is: does a will avoid probate?

    So a client comes to me and says “I’ve got a will. Does that mean my heirs, my beneficiaries, don’t need to go to court, don’t need to do probate with all of the expenses and public filings and legal fees?”  

    Unfortunately, the answer is no. A will does not avoid probate.  

    Probate is the court supervised process of carrying out a will – of giving a will effect. So if you make a will you are basically telling the probate court how to do things. So as we discussed earlier, in “Do I Need a Will?” one of my other videos, you don’t need a will.  

    A will is a step up over no plan at all. But it doesn’t accomplish probate avoidance, which is many people’s goal. If you want to avoid probate, you need some other plan more than just a will.  

    A common one would be a revocable trust. I love those because they’re just . . . They’re private and they’re very powerful. You can give any instructions you want in a trust. Umm. And have it administered, you know, entirely according to your instructions, without going to court. It can save lots of time. Lots of money. In addition to letting you, you know shape things how you want. 

    So usually, in fact, I would contend, hopefully always, the expense of going to a lawyer and having a revocable trust set up or some other probate avoidance plan is always going to pay for itself. Not always. That’s my caveat.  

    So a will does not avoid probate. Better than nothing. But if you want probate avoidance, you need other strategies: that can be a trust, that can be beneficiary designations, which we’ve talked about elsewhere.  

    If you come and see me for an initial planning meeting, we’ll talk about your situation and we will see what makes sense for your goals. There are a lot of planning techniques out there, and it’s a matter of finding the right plan for you. So book an appointment online or give me a call. Look forward to working with you. Thanks for watching!

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    Book your initial planning meeting with Stautz Law and we’ll discuss your individual needs. No obligation.

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