Estate Planning: Avoiding Probate Probate can be costly and time consuming. We'll show you a few potential ways to save.

When Elvis Presley died, his estate was worth over $10 million dollars1. Then it went through probate.After appraisal costs, legal fees, executor’s fees, and estate taxes, “The King’s” estate was left with only $3 million2. Because of improper estate planning, a whopping 73 of Elvis’ estate was wiped out. So what did all that money pay for? And how can you avoid some of the same mistakes? Let’s find out.Probate is the (usually lengthy) process of proving if a will is valid, clearing your estate of any debt, and making sure that no one challenges it. All of this takes place in court, which adds to the costliness. Will or no will, an estate must go through probate.But there are ways to reduce or eliminate costs associated with thecomplicated legal process. One of the most efficient includes establishing atrust. Assets and property within a properly drafted trust don’t have to passthrough probate. On top of that, upon death, assets are passed on relativelyquickly, especially when compared with probate. Your assets are also moreprotected from creditors when placed in a trust.But trusts aren’t your only option. If you choose not to establish a trust, thereare several ways you can help reduce costs. One of the best and easiest waysis to be prepared. If you have a 401(k), an IRA, a life insurance policy, or allthree, then you have three separate beneficiaries to name. By routinelyupdating your beneficiary designation, you avoid unwanted inheritances andensure that your wishes are carried out. Any assets that pass throughbeneficiary designations aren’t subject to probate, which makes their accuracyeven more crucial.You can also choose to own assets jointly with someone else. From stocks tohouses, if you own something jointly, that property is passed onto the survivorautomatically. Also, many brokerage houses and banks allow you to name abeneficiary on your personal accounts by establishing a TOD (Transfer onDeath) account. It’s one more way that your assets will pass relatively quicklyand easily to whomever you wish. Upon death, your accounts and their contents will be passed to whomever you’ve named.One other option is to gift your assets to family or friends before you pass away.By gifting the maximum tax-free amount each year ($11,000 in 2005), youreduce the amount of your estate, which, in turn usually reduces the amount ofprobate costs, which are usually based on the total estate value.By properly planning your estate with a financial professional and an estateplanning attorney, you can increase your chances of decreasing probate costsand avoiding costly mistakes. While not many people like to discuss their own mortality, the thought of family, friends, or charity losing large percentages of their inheritance and your estate to costs, fees, and taxes, should be enough for anyone to start planning.While Elvis’ estate may have been improperly managed early-on, since being bought out by his former wife, Priscilla and their daughter, Lisa Marie, it has become a major success story. With the proper management it has grown from a paltry $3 million, to over $250 million.3The lesson to be learned lies in the stark contrast between proper and improper estate management, and shows how important an estate plan is, whether you’re “the King,” or not.1 Back Room Technician, “Estates of Famous People” chart2 Stevens, Sue. June 30, 2005. Avoid the Estate Planning Blunders of Marilyn and Elvis. Morningstar.com http://news.morningstar.com/doc/article/0,1,137725,00.html?asection=archive3 Floyd, Elaine. March 16, 2001. Elvis Lives! Or His Estate, at Least, Is Very Healthy. Horsesmouth.comhttp://www.horsesmouth.com/hm.asp?r=0.2326471 ###This article was submitted by Robert Valentine of Financial and Retirement Management. Robert (CA Insurance Lic #0C23496) is a Registered Representative of and offers securities through Securities America, Inc., a Registered Broker/Dealer, Member NASD/SIPC. Advisory services offered through Financial and Retirement Management, a Registered Investment Advisory firm.

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