While setting up your estate is important, protecting it is even more crucial. Without proper protection your estate can be exposed to fraud and mismanagement. These issues are common and can end up eating away at the assets of your estate through litigation in court.
There are many ways you can protect your estate, so work with your attorney to take one or more of the following steps:
Write a Will and Require a Bond
A will is one of the oldest protections for an estate. They can be simple, straightforward and easy to create if done correctly. They also tend to be one of the most cost-effective methods of estate planning to help ensure your estate is handled the way you intend. By creating a will, you are legally signing a document that explicitly outlines which assets you want to be distributed to each of your beneficiaries or heirs.
The problem that some people see in drafting a will is determining who to appoint as your Personal Representative. That person needs to be trustworthy and able to handle the obligation you are entrusting them with. A simple easy way to help ensure the Personal Representative of your estate does what you intend is to require them to have a surety bond as Personal Representative. This helps to protect your estate and heirs in the event the PR steals or doesn’t handle the estate properly.
Set Up a Trust
Setting up a trust is a bit more complex and expensive, as there are many different trust options but many people choose this method of protection if they have a large estate. One of the benefits of forming a trust (depending on the type of trust) is that you maintain control over it until you pass away or become incapacitated, at which time it will pass onto a trustee to manage and administer. Having your Trustee carry a surety bond again helps to protect your trust and the beneficiaries of the trust from theft or mismanagement.
There are many types of trusts that you can form, so speak with your attorney to decide which is best for your estate.
Get a Surety Bond
A surety bond acts as a type of insurance for your estate or trust. It ensures that the party who is responsible for managing and distributing your assets does so correctly. If any fraud or mismanagement takes place, it can protect your estate and your beneficiaries.
Whether you are appointing a trustee or an executor, you should always make sure that they obtain a surety bond so that your estate has an extra layer of protection. If you are working with an attorney on setting up your estate, contact The Patrick J. Thomas Agency to learn more about the surety process in your state.
Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.