In these times of technology and security breaches, our personal privacy is a top concern. If you choose a Last Will and Testament as your estate planning document, or you choose not to create an estate plan at all, and you pass away, do you realize that private, personal information will be revealed to the public? Most people don’t, however that may be exactly what will happen in a process called “probate”.
All assets solely in your name must go through probate. Probate is a public process to transfer assets from the decedent to the heirs or legatees. In the probate process all of your assets, your debts, your heirs and what your heirs receive are listed. This is valuable information that can be used for a variety of purposes. Family and friends can check the probate proceeding to discover interesting tidbits about your life. Business competitors may review the probate proceedings for information about a company you own. Unscrupulous people can check the probate proceedings to see who is inheriting, so they can “help” your heirs with their new found wealth.
A recent example of the lack of privacy in probate is the estate of Lou Reed, a popular musician who died about a year ago. Looking through his probate papers in the Surrogate’s Court in Manhattan, it is known that his Will was 34 pages long, he named a longtime manager and friend, Richard Gotterer, as one of executors of his estate, and that he left his fortune to his wife, his mother and his sister. At the time of his death, Lou Reed’s estate was worth $30 million dollars. During the past year his estate has earned over $20 Million in income from copyrights, publishing and performance royalties. The probate proceeding will also reveal the fee that the executor has requested and will receive for handling the estate. All this information was gathered from the probate proceedings by reporters and published in newspapers, magazines, internet articles and now on the radio.
Could all of this publicity have been avoided? The answer is yes. If Lou Reed had prepared a Revocable Living Trust, and transferred his assets to his trust, all this information would be private and would not be available for public viewing.
This causes me to wonder why people do not use a Revocable Living Trust as their estate planning tool. My conclusion is that perhaps they are not informed about the benefits of a Living Trust.
The preservation of privacy in avoiding probate is just one of the benefits of the Living Trust. Probate expenses can add up quickly and can potentially be a lengthy, time-consuming proceeding. Emotionally, the process can be exhausting. A Living Trust can also make it harder to contest the estate.
Estate planning can work for you. The lack of planning can have disastrous impact on you and your family as life’s events occur. There are ways to preserve your estate, provide incentive for future generations, establish divorce protection, protect your privacy and give you peace of mind.
It is essential to meet with an estate planning attorney to determine which works best for your life situation. Many will set up a Revocable Living Trust, while others will decide that a Living Trust is not right for them and will set up a Will based estate plan. Most people like the Living Trust as their preferred estate plan, in order to maintain the greatest benefit of privacy.
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