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How To Avoid Probate With Estate Planning (1)

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					How To Avoid Probate With Estate Planning
When "The King," Elvis Presley died in 1977, his estate was worth an estimated $10 million dollars.
Then came probate. After all the fees: legal, appraisal, executor's fees, and estate tax, the Presley
estate was reduced to a paltry $3 million dollars. What happened to approximately 73 percent of Elvis'
estate? The answer is simple: probate.
So, what is probate? Probate is the process of clearing a will as either valid or invalid and making
sure that no one has a challenge against it. Probate also clears the estate of all debt, by paying
creditors against the estate. All of this goes through a sometimes very lengthy court process, which
can take a lot of money away from the estate. Whether or not a person has a will when he dies or not,
the estate must go through probate.
There are ways to avoid some of the pitfalls of the probate process. One of the best ways is to
establish a trust. If assets and property are in a trust, they do not have to pass through the probate
court and can go directly to the beneficiary, relatively quickly. These assets also can be protected
from creditors against the estate by using a trust.
You can also protect your assets from probate costs by regularly updating the beneficiaries to your
401K, IRAs, or life insurance policies. If you will update the beneficiaries regularly, then you can avoid
unwanted inheritances, because these designations are not subject to probate.
But these two aren't your only options. You can also choose own property with someone else. If you
own something with someone else and anything were to happen to you, the property would
automatically pass to the survivor. Some banks also allow you to set up a Transfer on Death (TOD)
account, where you can name a beneficiary to your personal banking accounts. Upon death, the
accounts would automatically transfer to the person you named.
Another option to avoiding probate pitfalls is to give your assets away to your relatives while you are
still alive. You can gift your relatives with the maximum tax-free amount ($11,000 in 2005.) By giving
away your assets, you reduce the amount of property that has to pass through probate upon your
death.
If you properly plan your estate with the help of an estate planning attorney or other financial
professional, you can decrease probate costs greatly. There are not many people who like to think
about what will happen when they leave this earth, however the thought of family and friends not
getting what you leave to them is distressing also. A little planning ahead of time could save your
beneficiaries a lot of money in the end. Elvis Presley's estate was obviously neglected and his
untimely death costs his daughter and other beneficiaries millions of dollars. With the help of Priscilla
Presley, Elvis' daughter, Lisa Marie has managed to rebuild the Presley estate, which now has a net
worth of around 250 million dollars. The estate recovered from the devastating blow that probate dealt
it.

Burbank real estate

				
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Description: Another option to avoiding probate pitfalls is to give your assets away to your relatives while you are