Have you ever wondered, “How can I keep my estate plan private?” Probably not. But with the recent death of music legend Aretha Franklin, a revelation emerged: the Queen of Soul had no estate plan, not even a will. With multiple lawyers on retainer, and a life-threatening illness she had been fighting for years, it’s not clear why she chose not to have an estate plan. What happens now is that the distribution of her considerable wealth, and any claims against her estate, will play out very publicly in the probate court of the county in which she lived. Since Aretha Franklin was famously private about her personal affairs, one can only imagine how she would feel about that.
Even if Ms. Franklin had had an estate plan, there is no guarantee it would have been private. Certain estate administration matters have to go through the probate court, and probate court records are public. However, had she so chosen, Ms. Franklin could have created an estate plan that would have kept her business out of probate, and away from curious eyes.
Your estate may not be of as much public interest as Aretha Franklin’s, but you might still have plenty of reasons to keep it private. Fortunately, with the assistance of a good estate planning attorney, keeping your estate plan private is not difficult to do.
Why Should I Care if My Estate Plan is Private?
You may be thinking that the privacy of your estate plan doesn’t matter that much; after all, you’ll be gone, right? Yes, but the people you love will be left behind, and they could be affected by the privacy (or lack thereof) of your estate plan.
Your last will and testament must be submitted to the probate court so that your estate can be administered and your wishes carried out. Your will includes a description of your personal effects, including artwork, jewelry, and other collectibles and identifies the people who will receive them. Of course, your will also distributes your cash, real estate, investment property, and business interests, as well as the executor you have chosen to oversee your estate. Your heirs will be identified by name, too, along with their addresses.
Once your will is filed, anyone is free to go to the probate court, look at your probate file, and even get copies of your will and other documents. Again, these are public records, and anyone who wishes to view them can do so without providing a reason: your heirs’ creditors, disinherited relatives, nosy neighbors, greedy friends, you name it.
If you want to protect your heirs from the prying eyes of those who may not have their best interests at heart, you can do so. In the process, you can keep your estate out of probate and make it easier for your loved ones to get access to the assets you have left to them.
Using Trusts to Keep Your Estate Private
A simple living trust is all it takes to keep your estate out of probate and provide privacy for your heirs and your personal matters. There are all types of trusts, and they can be as complex as you need them to be, but even the most straightforward trust accomplishes a number of things for you. First and foremost, any assets placed in a trust pass completely outside of probate. That means that records of those assets will not become court documents and will not become public.
Second, because there is no need to go through the probate process, the trustee you name in your trust document can distribute your assets directly to the loved ones named in the trust. They will have their inheritance as soon as possible, instead of having to wait months.
Third, using a trust gives you more control over the distribution of your assets. Let’s say you have a couple of kids who are in their late teens or early 20s when you die. As long as they are legal adults (18 or older), they will be entitled to receive the entire inheritance left to them in a will at one time. If the idea of a nineteen year old inheriting a large sum of money makes you uneasy, a trust is a better idea. With a trust, you can space distributions out or even tie them to certain life events, like graduating college, so assets are less likely to be squandered.
Trusts are not just for the wealthy, or those with complex estates. Many people use trusts to protect their privacy and their loved ones, and to circumvent the probate process. If you are interested in using a trust to keep your estate plan private, please contact our law office for more information.