When you are going through the estate planning process, one of the questions you might have is, “What happens to my money after I die?” Continue reading to discover your options regarding Transfer on Death arrangements, probates, and trust funding. You do not need to go through the estate planning process alone. Reach out to our experienced estate planning attorney today to discuss our services. We would be happy to walk you through each step of the process ahead.
Transfer on Death or Payable on Death Arrangements
To be sure your assets have a beneficiary designation, you can utilize either Transfer on Death (TOD) or Payable on Death (POD) arrangements. These are arrangements that allow account designations for naming beneficiaries. You will use TOD or POD arrangements to avoid probate in the event of your passing. You can either name individuals or your trust as the beneficiary.
What is probate?
Probate is a court process where an appointed personal representative or the executor provides the validity of the will and distributes the estate under the terms of the will. The purpose of probate is to move the title of the property from the deceased to the living person(s). To begin this process, the personal representative must file an application with the probate court to act as a PR. The PR can then provide the court with an inventory and appraisal of the property in the probate estate. They will also publish in the paper or send a note to alert the beneficiary and creditors.
The PR will have the responsibility to distribute the deceased’s property after the court closes probate. It is important to understand that probate can be a time-consuming and expensive process that could cost between 5 and 20 percent of the estate. It is not necessary to have probate depending on trust funding.
What is trust funding?
Trust funding is designed to manage and hold assets on someone else’s behalf with the assistance of a third party who remains neutral. Assets will be put into a trust document. It is possible to have a trust that is fully funded and nothing will go to probate. This is the intended use of the trust. For assets that have a beneficiary designation, the trust can be made the primary beneficiary.
The trustee will have control over everything titled in the trust and will be able to distribute anything in the trust estate according to the rules of the trust. In the case that the trust is not the beneficiary, the beneficiaries will decide what to do with the asset they received.
Contact our experienced Montgomery County, Maryland firm
The attorneys at JD Katz have years of experience compassionately guiding clients in Maryland through the estate planning and administration process. Our firm also has experience with matters of elder law, business law, tax law, and litigation. For a legal team that will put your needs first, contact JD Katz today.