Klitzman Law Group, PLLC

Beneficiary Battle over Presley Estate Reveals Possible Problems in Estate Planning

“A badly in debt woman dies leaving the proceeds of substantial insurance policies to her children only to have her trust contested by relatives who claim an amendment naming the children as beneficiaries is invalid with no witnesses, misspelled names, suspicious signatures and was never given to previous trustees for review as required by agreement. A long, expensive, and protracted legal battle likely is brewing.”

This is the situation facing the estate of Lisa Marie Presley, whose estate is being challenged by her mother, Priscilla Presley, as described in a recent article, “Presley beneficiary battle sets example of poor estate planning practices” from Insurance NewsNet. These situations are not uncommon, especially when there’s a lot of money involved. They serve as a teachable moment of things to avoid and things to absolutely insist upon in estate planning.

Lisa Marie’s estate is being challenged because of an amendment to the trust, which surfaced after she died. The amendment cut out two trustees and named Lisa Marie’s children as executors and trustees.

At stake is as much as $35 million from three life insurance policies, with at least $4 million needed to settle Lisa Marie’s debts, including $2.5 million owed to the IRS.

When this type of wealth is involved, it makes sense to have professional trustees hired, rather than appointing family members who may not have the skills needed to navigate family dynamics or manage significant assets.

A request to change a will by codicil or a trust by amendment happens fairly often. However, some estate planning attorneys reject their use and insist clients sign a new will or restate a trust to make sure their interests are protected. In the case of Lisa Marie, the amendment might be the result of someone trying to make changes without benefit of an estate planning attorney to make the change correctly.

The origins of the estate issues here may go back to Elvis’ estate plan. His estate was worth $5 million at the time of this death, $20 million if adjusted for inflation. His father was appointed as the executor and a trustee of the estate. His grandmother, father and Lisa Marie were beneficiaries of the trust. Lisa Marie was just nine when her famous father died, and her inheritance was held until she turned 25.

When his father died, Priscilla was named as one of three trustees. When his grandmother died, Lisa Marie was the only surviving beneficiary. She inherited the entire amount on her 25^th birthday—worth about $100 million largely at the time because of Priscilla’s skilled management.

Terminating such a large trust and handing $100 million to a 25 year old is seen by many estate planning attorneys as a big mistake. Distribution at an older age or over the course of the beneficiary’s lifetime could have been a smarter move. Lisa Marie reportedly blew through $100 million as an adult and was millions of dollars in debt, despite the estate having plenty of cash because of two large life insurance policies.

In 1993, Lisa Marie established a trust naming her mother and former business manager as trustees. The amendment in question seems to have been written in 2016, removing Priscilla and business manager Siegel as trustees, appointing Lisa Marie’s daughter and son as trustees, and naming her son and her fourteen year old twin sons as beneficiaries.

Priscilla’s attorneys say they had no prior knowledge of the change. Certain changes in estate plans require written notification of people with interest in the estate, which did not occur. They are also challenging the amendment’s authenticity, saying it was neither witnessed nor notarized. Priscilla’s name is misspelled and Lisa Marie’s signature is not consistent with other signatures of hers.

The estate is being contested, with a preliminary hearing on the matter scheduled for April 13.

Any changes to an estate plan, particularly those involving changes to the will, trusts or beneficiaries, should be done with the help of an experienced estate planning attorney. When large changes are made, or large assets are involved, a simple codicil or amendment could lead to complicated problems.

Reference: Insurance NewsNet (Feb. 17, 2023) “Presley beneficiary battle sets example of poor estate planning practices”

What Documents are in an Estate Plan?

“There are frequently asked questions that people have about revocable living trusts, wills, supported decision making agreements (new), powers of attorney and advance health care directives.”

Understanding how estate planning documents work is central to creating an estate plan for each individual’s unique situation. An estate planning attorney needs to know the details of your life, not because they’re nosy. It is because this is how they can create a plan tailored to protect you during your lifetime, plan for long-term care and distribute assets upon your death. A recent article, “Understanding estate planning documents” from Lake Country Record-Bee, explains in broad strokes what each estate plan needs to include.

The will nominates an executor to administer the decedent’s estate, including the distribution of specific gifts and other assets. Depending on your state of residence, the will must be witnessed by one or two people who have no interest in the outcome of your will. At death, the distribution of assets only applies to those in the estate and not to those who receive property transferred under a trust, through a designation of death beneficiary form or a joint tenancy title.

A trust controls and manages assets placed in the trust during life and after death. Assets held in a living trust are used to avoid conservatorships, should become incapacitated during life. Assets in trusts do not go through probate.

Assets transferred into a living trust must belong to the person to establishes the trust, known as the settlor. A married couple may establish a joint trust to receive community property, if they live in a community property state. Each spouse may choose to transfer his or her own separate property assets into a joint trust, or keep their separate property assets in separate trusts.

Trust assets are titled for ownership and control to the trustee. The trustee is a fiduciary, meaning they are the legal representative of the trust and administer the provisions of the trust as directed in the trust documents.

You should always have a successor trustee for a trust, who takes office when the last initial trustee resigns, becomes incapacitated, or dies. How and when the transfer to the successor trustee takes place is included in the trust documents. Some trusts include a specific method to fill a trustee vacancy, if no nominated successor trustee accepts the role.

Living trusts can be changed by the settlor. The incapacity or death of the settler makes a living trust an irrevocable trust. A joint trust, however, sometimes allows either settlor acting alone to amend the living trust. Your estate planning attorney will help you determine whether a joint trust makes sense for your family.

Powers of attorney (POA) allows a person (the principal) to authorize another person (the agent) to act as a representative over some or all of the principal’s own legal and financial affairs. The POA does not have any power over a trust; the trustee is in charge of the trust. A POA can be effective on signing or effective upon incapacity of the principal. POA forms do not always reflect specific individual wishes, so it’s best to have one created by an estate planning attorney.

The Advance Health Care Directive (AHCD) delegates authority to an agent to make decisions and act on the principal’s needs in health care. The AHCD must be created and be in place before incapacity occurs. An incapacitated person cannot sign legal documents.

Reference: Lake County Record-Bee (Feb. 18, 2023) “Understanding estate planning documents”

Does Divorce Have an Impact on Estate Planning?

“When you're in the midst of a divorce, you're probably not thinking about estate planning or your will. However, if you're divorcing, you should think about the impact a divorce can have on an estate plan.”

Even the most amicable divorce requires a review and update of your estate plan, as explained in a recent article from yahoo! finance, “I’m Divorcing. Will That Impact My Estate Planning?” This includes your will, power of attorney and other documents. Not getting this part of divorce right can have long-term repercussions, even after your death.

Last will and testament. If you don’t have a will, you should get this started. Why? If anything unexpected occurs, like dying while your divorce is in process, the people you want to receive your worldly goods will actually receive them, and the people you don’t want to receive your property won’t. If you do have a will and an estate plan and if your will leaves all of your property to your soon-to-be ex-spouse, then you may want to change it. Just a suggestion.

State laws handle assets in a will differently. Therefore, talk with your estate planning attorney and be sure your will is updated to reflect your new status, even before your divorce is finalized.

Trusts. The first change is to remove your someday-to-be ex-spouse as a trustee, if this is how you set up the trust. If you don’t have a trust and have children or others you would want to inherit assets, now might be the time to create a trust.

A Domestic Asset Protection Trust (DAPT) could be used to transfer assets to a trustee on behalf of minor children. The assets would not be considered marital property, so your spouse would not be entitled to them. However, a DAPT is an irrevocable trust, so once it’s created and funded, you would not be able to access these assets.

Review insurance policies. You’ll want to remove your spouse from insurance policies, especially life insurance. If you have young children with your spouse and you are sharing custody, you may want to keep your ex as a beneficiary, especially if that was ordered by the court. If you received your health insurance through your spouse’s plan, you’ll need to look into getting your own coverage after the divorce.

Power of Attorney. If your spouse is listed as your financial power of attorney and your healthcare power of attorney, there are steps you’ll need to take to make this change. First, you have to notify the person in writing to tell them a change is being made. This is especially urgent if you are reducing or eliminating their authority over your financial and legal affairs. You may only change or revoke a power of attorney in writing. Most states have specific language required to do this, and a local estate planning attorney can help do this properly.

You also have to notify all interested parties. This includes anyone who might regularly work with your power of attorney, or who should know this change is being made.

Divide Retirement Accounts. How these assets are divided depends on what kind of accounts they are and when the earnings were received. The court must issue a Qualified Domestic Relations Order (QDRO) before defined contribution plans can be split. The judge must sign this document, which allows plan administrators to enforce it. This applies to 401(k) plans, 403(b) plans and any plans governed under ERISA (Employment Retirement Income Security Act of 1974).

Divorce is stressful enough, and it may feel overwhelming to add estate planning into the mix. However, doing so will prevent many future problems and unwanted surprises.

Reference: yahoo! finance (Feb. 3, 2023) “I’m Divorcing. Will That Impact My Estate Planning?”

What Strategies Minimize Estate Taxes?

“With 2022 bringing very little change to trust and estate law, 2023 remains a prime opportunity to take advantage of the favorable tax landscape.”

The gift and estate tax benefits from the Tax Cuts and Jobs Act (TCJA) are still in effect. However, many provisions will sunset at the end of 2025, according to a recent article “Trust and estate planning strategies” from Crain’s New York Business.

The most important aspect for estate planning was the doubling of the estate, gift and generation-skipping transfer tax exemptions. Adjusted for inflation, the current federal estate, gift and GST exclusion is $12.92 million in 2023. This is more than double the pre-TCJA amount, which will return in 2026, unless Congress makes any changes.

While these levels are in effect, there are strategies to consider.

• Maximize gifting up to the 2023 annual exclusion of $17,000 per taxpayer, or $34,000 for married couples.
• Depending on the value of the entire estate, consider strategies to keep it below the current exemption among of $12.92 million or $25.84 (married). If the estate is less than the exemption amount, no federal estate tax will need to be paid.
• Plan charitable giving, including charitable IRA rollovers to make the most of the deduction on 2023 income tax returns. Qualified charitable distributions made directly from an IRA could be used to satisfy Required Minimum Distributions (RMDs) and exclude them from taxable income.
• Set up 529 Plan accounts for children and/or grandchildren and consider making five years of annual exclusion gifts. Take into account any gifts made during the year to children and/or grandchildren when doing this.
• Submit tuition or any non-reimbursable medical expenses directly to the school or medical provider to avoid having these amounts count towards the annual or lifetime gift tax exemption.
• Discuss the use of a Grantor Retained Annuity Trust (GRAT), an irrevocable trust created for a certain period of time. Assets are placed in the trust and an annuity is paid out every year. When the trust expires and the last annuity payment is made, assets pass to beneficiaries outright or remain in a trust for beneficiaries.
• Ask your estate planning attorney if a Qualified Personal Residence Trust is a good fit for you. This is an irrevocable trust allowing homeowners to transfer their home at a significantly discounted rate.
• Explore intrafamily lending, which is used to transfer partial earnings to family members without lowering the lifetime estate tax exemption or triggering gift taxes.
• Re-evaluate insurance coverage, which can provide opportunities to defer or avoid income taxes, or both, and provide assets to pay estate taxes or replace assets used to pay estate taxes.

Not all of these steps will be appropriate for everyone. However, understanding the options and discussing with your estate planning attorney will ensure that you are using the most effective strategies to achieve wealth preservation.

Reference: Crain’s New York Business (Feb. 13, 2023) “Trust and estate planning strategies”

How to Pass Crypto to Heirs

"Huge amounts of crypto are lost not just from a lack of legacy provision, but when passwords and private keys are mislaid.”

Matthew Mellon was a direct descendent of the founder of the Mellon Bank and inherited $25 million. He invested early in cryptocurrency, against his family’s wishes, as explained in the article “About Loss and Crypto: Never Lose Access, Ensure Loved Ones Inherit it” from Hackernoon. When he died suddenly, his $2 million investment had reached approximately $200 million. However, unlike his own traditional inheritance, his crypto fortune was so well protected that no one was able to access it.

Mellon reportedly kept his digital keys in cold storage, using different names in vaults of various banks across the country. However, he had not shared any access information with anyone. His crypto hoard still exists on the blockchain. However, without access through private keys, it is untransferable.

There are countless cases just like Matthew Mellon. It’s estimated that around 20% of the total supply of Bitcoin—about $90 billion—is currently lost.

The digital environment is still relatively new, and blockchain logic is even newer. Losing access to a digital wallet is alarming, as is losing access to a fortune. The current infrastructure of crypto requires owners to have knowledge of how to access various security tools, from digital wallets to seed phrase to encrypted passwords and then, if they plan on eventually transferring their digital assets, to educate heirs or executors regarding how to access their crypto.

Crypto exchanges offer custodial wallets. However, if the user is not in control of their private keys, or if there is a security breach or the exchange collapses, which does happen, funds can be lost.

Having a bank or estate planning attorney serve as the executor of a will including cryptocurrency requires educating the person who will be in charge of accessing and distributing the asset.

Passwords change frequently and may be tied to a two-factor authentication system, meaning the executor would also need access to the owner’s secondary device, such as a phone or email on the owner’s computer.

According to a 2020 study, less than a quarter of all crypto holders have a plan in place for how their funds will be distributed when they die. Nearly 90% are worried about what will happen to their assets when they die. However, few take the steps to protect their investment.

In such a new developing asset class, valuable wealth will continue to go astray unless planning and education takes place. If you’ve created any assets in cryptocurrency, does someone besides you have the ability to access them? If no, it’s time to plan for the unexpected.

Reference: Hackernoon (Feb. 13, 2023) “About Loss and Crypto: Never Lose Access, Ensure Loved Ones Inherit it”

What are RMD Rules for 2023?

“The SECURE 2.0 Act, which was signed into law in December 2022, changes the RMD rules for retirement savers beginning in 2023.”

After a certain age, retirement account owners are required to take minimum distributions from traditional IRAs and 401(k)s. The SECURE 2.0 Act has changed the rules, reports the article “New RMD Rules for 2023” from U.S. News & World Report.

Before the SECURE 2.0 Act, the age to start RMDs was 72 for retirement accounts, including both traditional IRAs and 401(k)s. Now, the RMD age has increased in two steps. Starting in 2023, the RMD age increases to 73, and in 2033, the RMD age will increase to 75. If you were born between 1951 and 1959, you’ll need to start RMDs after age 73. Born after 1960? You can delay RMDs until after age 75.

There are important deadlines, and while you get extra time to take your first RMD, you must take subsequent RMDs every calendar year.

Here’s the twist: remember, RMDs are taxable. If you take your first RMD in 2023 because you celebrate your 72^nd birthday that year, you’ll have some decisions to make. You can take the RMD by December 31, 2024, or delay it to no later than April 1, 2025. But if you delay it to April 2025, you’ll take two RMDs in one tax year.

If your income from Social Security and other sources is more than you need, those higher ages for RMDs have their advantages. Retirement savings accounts may grow tax-free for a longer period of time. The change may also bring savings in Medicare costs. The price of Medicare premiums is tied to income. When retirees take distributions from pre-tax retirement accounts, it increases their income and their premiums. By waiting on withdrawals, income can be lowered, leading to lower Medicare premiums at that time.

However, the delay in taking distributions may also lead to higher taxes during later stages of retirement. If you don’t take funds early, you may find yourself with higher RMDs later, leading to larger tax bills.

Account owners who don’t take an RMD at the right time usually face harsh penalties. Prior to the SECURE 2.0 Act, the tax penalty was 50% on their required amount not withdrawn. Now the penalty is 25%. If the mistake is corrected quickly, the penalty can even decline to 10%, as long as the person can demonstrate the missed RMD was due to an error and reasonable steps are being taken to resolve the issue.

There are changes to qualified charitable distributions as well. Account owners age 70 ½ and older may now make IRA qualified charitable distributions of up to $100,000 per year without owing income tax on the transaction, which can count as their RMD for the year. The qualified charitable distribution limit is now linked to inflation and may increase in future years. A one-time gift of $50,000 may be made directly to an eligible entity through a charitable gift annuity, charitable remainder unitrust or charitable remainder annuity trust.

Based on the SECURE Act 2.0, Roth 401(k) account owners no longer have to take RMDs at all. This aligns the Roth 401(k) with Roth IRAs, which also do not require any distributions in retirement.

Reference: U.S. News & World Report (Feb. 10, 2023) “New RMD Rules for 2023”

What Should Seniors Know before Remarrying?

“As the calendar turned to 2023, many of us took a moment to think about resolutions. I want to lose 10 pounds. I want to read things that aren’t just about work. I want to learn how to play pickleball. Or maybe this year I’ll give a relationship another shot. Maybe I’ll even remarry.”

Seniors in particular think about remarrying with an understandable degree of concern. Maybe your last relationship ended in a divorce, or there’ve been too many dating disasters. However, according to a recent article from MSN, “Planning to remarry after a divorce? 6 tips to protect your financial future,” there are some steps to take to make relationships easier to navigate and protect your financial future.

Not all of them are easy, but all are worthwhile.

No marrying without a prenup. Who wants to think about divorce when they’re head-over-heels in love and planning a wedding? No one. However, think of a prenup as about the start, not the end. It clarifies many issues: full financial clarity, financial expectations and clear details on what would happen in the worst case scenario. Getting all this out in the open before you say “I do” makes it much easier to go forward.

Trust…but verify. Estate planning ensures that assets pass as you want. A revocable living trust set up during your lifetime can be used to ensure your assets pass to your offspring. Unlike a will, the provisions of a revocable trust are effective not just when you die but in the event of incapacity. A living trust can provide for the trust creator and their children during any period of incapacity prior to death. At death, the trust ensures that beneficiaries receive assets without going through probate.

Consider life insurance. Life insurance, possibly held in an irrevocable life insurance trust (ILIT), which allows proceeds to pass tax-free, can be used to provide funds for a surviving spouse or children from a prior marriage. Make sure to review all insurance policies, including life, property and casualty and umbrella insurance to be sure you have the correct coverage in place, insurance policies are titled correctly and premiums continue to be paid.

Estate planning. While you are planning to remarry is a good time to check on account titles, beneficiary designations and powers of attorney. Couples should review their estate plans to be sure planning reflects current wishes. Married couples have the benefit of the unlimited marital deduction, meaning they can gift during their lifetime or bequeath at death an unlimited amount of assets to their U.S. citizen surviving spouse without any gift or estate tax. For unmarried couples, different estate planning techniques need to be used to pass the maximum amount to partners tax free.

Check beneficiaries. After divorce and before a remarriage, check beneficiaries on 401(k)s, pensions, retirement accounts and life insurance policies, Power of Attorney and Health Care Power of Attorney documents. If you remarry, a prenup agreement or state law may require you to give some portion of your estate to your spouse, so have an estate planning attorney guide you through any changes. You should also check beneficiaries of life insurance and retirement plans.

Choose trustees wisely. Consider the advantages of a corporate trustee, who will be neutral and may prevent tensions with a newly blended family. If an outsider is named as an executor, or to act as a trustee, they may be able to minimize conflict. They’ll also have the professional knowledge and expertise with legal, tax and administrative complexities of administering estates and trusts.

Reference: MSN (Feb. 11, 2023) “Planning to remarry after a divorce? 6 tips to protect your financial future”

How Do I Leave Assets for Heirs?

“No family is exactly like another, so here are some considerations to help you decide which distribution strategy best suits your situation, values and goals.”

How to distribute assets to beneficiaries isn’t always a simple decision. Not only do you want to consider how best to distribute assets, you also want to consider how and when beneficiaries should be able to access inheritances and then ensure this is all documented in your estate plan. A recent article from Kiplinger, “Estate Planning? Four Strategies for Leaving Assets to Your Heirs,” offers a few general considerations. Keep in mind what works for one family may not work for another, even when circumstances appear to be the same.

Strategy 1—Leaving Assets Outright. This is the simplest way to leave assets. However, it holds the potential for problems. If a family has significant wealth, heirs may be likely to live off their inheritance rather than become productive members of society. Risks like divorce or falling prey to scammers must also be considered. This approach is generally discouraged when families with significant wealth are planning to leave money to heirs, unless they have devoted a great deal of time and effort to teaching their children about handling large resources.

Strategy 2—Distributing Assets in Stages. By distributing assets in stages, a family can manage their wealth without putting entire inheritances at risk all at once. Families distributing assets in stages often use trusts to distribute assets at either certain ages or milestones, such as getting married, buying a home, or the arrival of children. Another is to pay a certain percentage of the trust to the beneficiary at specific ages, such as 10% at age 30, 20% at age 40, etc.

Strategy 3—A Discretionary Lifetime Trust. This type of trust maintains assets for the lifetime of the heirs. It offers the highest level of protection from outside risks like divorce, poor money management or lawsuits. The discretionary lifetime trust also creates a legacy for future generations. The trustee has the discretion to make distributions, but the grantor can also include instructions for the trustee, such as allowing the trustee to provide funds for certain uses, such as a down payment on a home.

Strategy 4—A Combination of Distribution Strategies. A combination of the above strategies may work best for families, so beneficiaries may receive some of their inheritance and leave the balance in trust. This allows heirs full access to a certain amount of money to support their lifestyle while pursuing their own ambitions, preventing them from being dependent on the success of their family.

There are many different tools used to achieve one or more of these goals. An experienced estate planning attorney is the best source for creating a plan to serve the family and the individual.

Reference: Kiplinger (Feb. 8, 2023) “Estate Planning? Four Strategies for Leaving Assets to Your Heirs”

Can a Power of Attorney Withdraw Money from Bank Account?

“The first step in understanding whether a power of attorney can transfer money to themselves is to understand the different types of power of attorney.”

A power of attorney, or POA, is a legal document giving another person the legal authority to make financial and legal decisions on your behalf. Known as an agent or attorney-in-fact, you should only name someone to be your POA, if you trust them implicitly and believe they will always manage your affairs with your best interest in mind, according to the recent article titled “Can A Power Of Attorney Transfer Money To Themselves?” from Washington Independent.

There are different types of power of attorney and ethical and legal considerations surrounding the transfer of money. The two main types of POA are general POA and durable POA. A general POA gives the agent broad authority to handle financial and other matters on your behalf, and the power ends if you become incapacitated. A durable POA remains in effect, if you become incapacitated and continues until your death or until it is revoked.

The powers given to an agent vary widely depending on the state laws governing the document, and also vary depending on the specific document. In general, an agent can use the POA to handle a wide range of financial matters, including paying bills, managing investments, buying and selling real property and signing legal documents.

Using non-state specific blank forms downloaded from the web leads almost always leads to complicated (read: costly and time-consuming) problems for an agent. The specific powers granted to the agent need to be spelled out in the document. For example, you may wish for your POA to manage paying household bills, but not to sell the house.

There are also ethical considerations. While the POA gives the agent the authority to transfer money on your behalf, they are fiduciaries and are held to a higher standard of ethics. They must act in your best interest at all times.

Transferring money from your account to the agent’s account for their benefit would be a clear violation and could result in legal consequences, including criminal charges. The transfer could be challenged in court and the agent could be held accountable for any damages.

If you are concerned about a person abusing this role, there are steps to take to minimize the risk.

• Chose a trustworthy and reliable person to serve as your agent.
• Limit the powers granted by having a customized Power of Attorney drafted by an experienced estate planning attorney. The document could specify that the agent is not permitted to transfer money to themselves or use your funds for their personal benefit.
• Monitoring the action of the agent. If you are incapacitated, name a person to monitor the agent and provide them with contact information for your estate planning attorney if there are any questions.

Reference: Washington Independent (Feb. 7, 2023) “Can A Power Of Attorney Transfer Money To Themselves?”

What are the Advantages of Putting Your Home in a Trust?

“If you have a residence you would like to pass onto loved ones after your death, and you’re worried about your home going into probate, you may want to put your home in a property trust.”

Property trusts allow you to place your personal residence or any property you own into a trust to be given to a beneficiary, explains a recent article, “When Should I Put My Home in a Trust,” from yahoo!life.com. Placing your home in a property trust makes it far more likely your home will go to its intended beneficiary.

The property trust can be a revocable or irrevocable trust. Which one you use depends on your unique circumstances. If it’s a revocable trust, you can change the terms of the trust up until your death. However, because you maintain control of the asset in a revocable trust, it’s not protected from creditors.

If the main reason you’ve put the house into a trust is to protect it from creditors, a court could reclaim the asset if it were determined the sole reason for the transfer into the trust was to elude creditors.

Generally speaking, people have three basic reasons to place their homes into property trusts—to avoid probate, to keep their transaction private and to keep the transfer simple.

Avoiding probate. People who put their homes in a property trust often do so to avoid having their home going through the probate process. When the owner dies, their estate goes through this court process and any debts or taxes owed on the property are paid. If there is no will giving direction to how the property should be distributed, then it is distributed according to the state’s laws.

If the home is not in a trust and not mentioned in a will, the property will usually go to a spouse or child, although there’s no guarantee this will happen. If there is no spouse and no offspring, the property will go to the next closest living relative, such as a parent, sibling, niece, or nephew. If no living relative can be found, the state inherits the property.

Chances are you don’t want the state getting your family home. Having a will, even if you don’t put your property into a trust, is a better alternative.

The cost and time of probate is another reason why people put their homes in trusts. Probate costs are borne by the estate and thus the beneficiaries. Probate also takes time and while probate is in process, homes need maintenance, taxes need to be paid and costs add up. If the house is sitting empty, it can become a target for thieves and property scammers.

Another benefit of a property trust is to keep the transfer of the home private. If it goes through probate, the transfer of property becomes part of the court record, and anyone will be able to see who inherited the home. When family dynamics are complicated, this can create long-lasting family battles.

A property trust is also far simpler for your executor, especially if the home is in another state. If you have a vacation home in Arizona but live in Michigan, your executor will have to navigate probate in both states.

Speak with an estate planning attorney about whether a property trust is right for you. They will create a property trust and transfer the property into the trust. This is a straightforward process. However, without the guidance of an experienced professional, mistakes can easily be made.

Reference: yahoo!life.com (Jan. 31, 2023) “When Should I Put My Home in a Trust”