Personal structuring is a procedure in which you identify all your assets and draw up a will to distribute them after your death. Before entering personal structuring, two important concepts you need to understand are estate and property. Estate refers to the total of all the property owned by an individual before they are distributed under a trust, will, or inheritance laws, including all assets and liabilities. Property can be divided into real and personal property. Real property is simply real estate, while personal property refers to everything else – cash flow notes, cars, household items, and other physical belongings.

One of the major advantages of personal structuring is to avoid dying “in testate.” Dying in testate means dying without having left a will or trust, which serve as instructions for passing on your estate. Without a will, inheritance laws will take over the distribution of your estate, and if no suitable heir is found, your assets will be taken by the state.

Many people solve this problem by creating a trust, which serves as a bridge between the heirs and the estate. Under a trust, the estate is protected from several risks, especially probate. Probate is a legal procedure for identifying the heirs of an estate and their respective shares, and transferring ownership from the decedent’s name to theirs. Drawing up your will takes care of the first step; otherwise, your state will find the heirs and use its own formula to distribute their shares.

But the second step is often costly and time-consuming, even with a will. Re-titling of property involves a court-administered procedure, since it is the only way you can transfer ownership from the dead to the living. On average, probate costs from 6% to 10% of the estate’s value. That means the probate process for a $200,000 estate can cost $12,000 to $20,000. And because the fair market value is considered in addition to net worth, it often involves a lengthy litigation that can drag on for several years. Family battles and breaches of privacy are also common.

One of the best ways to avoid probate is through a family estate planning trust. This can either be a life estate or a living trust. In this arrangement, you transfer your estate to a trustee, who will then transfer it to your heirs when the time comes. This way, re-titling your property after your death is simply a matter of transferring ownership from your trustee to your heirs.

Note that your trustee is considered the legal owner of your estate, but only for transfer purposes. His only job is to handle the transfers after your death. That means you still have full control of your estate during your life. You can also set the details of the transfer any way you like, without facing high transfer costs, court supervision, or excessive delays.

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