While buying a home is a time spent looking forward to a better life, one should also view the process as an opportunity to plan for the end of one’s life. Considering what you leave behind for your loved ones is as important as building your own future, so even first time homeowners in Hawaii should be considering ways to make that time easier for your family. That means doing what you can now to limit the grueling process of probate, years from now.
Revocable Trusts Can Make Life Easier For Your Survivors
When meeting with an attorney for the purposes of their estate planning in Hawaii, many individuals and couples opt for a revocable trust instead of a will. The reasoning behind this move is that trusts spend far less time in probate, making it possible for heirs to receive their inheritance in a more timely manner. In addition to shaving months off of the probate process, a trust could end up saving families thousands of dollars in legal fees.
Another advantage to establishing a trust of which many people are unaware is that the Federal Deposit Insurance Corp. insurance limit is higher than it is on individual bank accounts. Where the FDIC only insures individual accounts up to $250,000 in many banks, trusts are granted a higher limit, usually an additional $250,000 per beneficiary.
Widely Unknown Facts About Revocable Trusts
There’s an undeniable advantage to first time homeowners in Hawaii by including their real estate in a revocable trust. By doing so, the property can avoid forced sale by the state to cover debts in probate. Instead, the trust will pass the home on directly to your beneficiaries upon your death, avoiding court interference. The trust can also detail your wishes for how any existing lien on the property should be handled. For instance, you may want other assets in the trust to be used to pay off that debt, or you can leave that decision up to your trustee. In any case, the revocable trust allows you to decide what will be done with your home, confident that your last wishes will be respected.
Another benefits of establishing a revocable trust, when conducting your estate planning in Hawaii, is that the trust is a private document. Unlike a standard will, the trust doesn’t go through probate and, therefore, doesn’t fall under public domain. Copies of any will can be obtained by requesting it from the court, but trusts are not available in this way.
Unfortunately, if litigation occurs, such as a disinherited heir contesting the terms of the trust, the trust will become a part of public records. Copies of the trust will be made available during the litigation process, causing the details of the trust to become publicly available.
Finally, it should be noted that a will is still necessary, or, at least, advised in setting up your final wishes. When a will is left behind, the court uses that document to open up the estate to probate, allowing creditors to make claims against the decedent’s assets for a limited period of time. Usually, that term is no longer than three months.
Why is that good? Without probate, creditors have up to two years to make claims against an estate. For that reason alone, it’s better to have a will in place.
There are many more advantages to setting up a revocable in addition to a will. By discussing the option with an experienced probate lawyer, you can decide if this is the best route for your circumstances.