“Probate” – a word that creates fear and dread in the hearts of many. (For more information on what “probate” is, see my previous blog, “What is Probate?”) But the truth is: while the probate process in some other states is complex, time-consuming and expensive, Maine has a streamlined probate process which for most people is relatively fast and is no more expensive than alternatives to probate.
Reasons to avoid probate. Nevertheless, in some instances, it can make sense to make arrangements to avoid probate. This is true if:
- You have real estate outside of Maine; or
- You have concerns about privacy and want to keep the details of your estate plan private.
Ways to avoid probate. A number of simple ways can be used to avoid probate, such as:
- Putting real estate, bank accounts and investment accounts in joint names;
- Designating beneficiaries on investment accounts, retirement plans, annuities, and life insurance;
- Using “transfer on death” designations (“TOD” or “POD”) on accounts.
Using a Revocable Living Trust to avoid probate. A “revocable living trust” may also be part of a plan to avoid probate. This is done as follows: a lawyer writes up a trust document. Under this document, you name yourself as trustee. This means that during your life, and for as long as you are mentally competent, you remain in control of your assets. You are able to add assets to or remove assets from the trust, spend money from it, change the terms of the trust, or revoke the trust altogether. You also name a “successor trustee”: a trusted person (such as a family member or bank) to take charge of the assets when you die, or possibly sooner, if you become mentally incompetent. When you die, the successor trustee pays bills and then distributes money and property according to the directions in the trust document, to the people you name in the document and in the amounts directed by you. This can all be done without anyone having to file papers in the probate court. This preserves your privacy. And if you have real estate outside of Maine, it avoids the necessity of filing for probate in another state, which can indeed be expensive.
When considering whether to have a trust of this type prepared, be aware that the fees will be higher than if you go with a simple will. This is because, in addition to the drafting of the trust document, deeds must be prepared, transferring your home and other real estate to the trust. Your bank and investment accounts will also need to be transferred to the trust, and beneficiaries will need to be changed on your retirement plans and life insurance. This will all require more time on the part of your attorney, for which you should expect to be billed.
(This blog is by attorney Sally M. Wagley, a Maine elder law attorney with the firm of Levey & Wagley, P.A., in Winthrop, Maine. The information provided on this website is for informational and educational purposes only. This information should not be construed as rendering legal advice or offering an answer to a specific legal problem.)