what is probate?
when someone dies, they leave behind an estate consisting of everything they owned at the time. probate is the legal process that occurs after someone dies to settle their estate. probate serves several important functions, including authenticating the last will and testament, allowing creditors to get paid, and distributing the remaining assets to beneficiaries or heirs. probate is a public process, meaning that if a will is submitted for probate the terms of that will become a matter of public record.
assets are distributed to beneficiaries according to the terms of a will or to legal heirs under state law at the end of probate. one reason to avoid probate is that probate is a costly and time-consuming process. even without legal challenges to the will or probate process that can further slow it down, probate typically takes months to finish. in addition to delays in asset distribution, the expenses involved in probate can significantly diminish the value of the estate that is left to pass down.
what are the benefits of making a last will and testament?
a last will and testament, often just called a will, allows the person making the will to decide who inherits from their estate. there are several important benefits gained from making a will, starting with the knowledge that you avoid leaving behind an intestate estate. an intestate estate is an estate where there is no will or trust directing the distribution of estate assets. when you die intestate, the laws of your state of residence dictate what happens to your assets. in short, you let the state distribute your assets.
another benefit of a will is the ability to appoint an executor. the executor helps propel your estate through probate. the right executor helps the probate process run smoothly and efficiently. if you do not appoint an executor, the probate court may appoint a personal representative to oversee probate which can cost your estate time and money. if you are a parent, a will can identify a guardian for your minor child.
finally, a will simplifies the probate process. a will makes it clear who your estate’s heirs are and what assets they inherit. a will removes the burden to identify and locate legal heirs and minimizes disputes since your wishes are plainly laid out in a legal document.
if you opt for a living trust to distribute your estate, a pour-over will pours assets into a trust after your death. a pour-over will serves as a backup in case you inadvertently missed an asset or you obtained an asset prior to death that did not get transferred into the trust.
how can i benefit from a living trust?
a living trust allows your appointee (the trustee) to protect and manage assets intended for beneficiaries. as the name implies, a living trust, whether revocable or irrevocable, is established while you are alive. in contrast, a testamentary trust is formed after your death through your will. as the maker of the trust, you choose the terms of its administration and which assets go into the trust. the trustee follows those terms or instructions.
the benefits of a living trust are numerous. for one, trust assets are non-probate assets. assets held in the trust bypass probate and can be distributed to beneficiaries immediately after your death if the trust terms direct such distributions. assets held in a revocable living trust are still part of your taxable estate and are subject to state and federal estate taxes.
a will cannot help with incapacity. a revocable living trust, however, can help and eliminate the need for a financial power of attorney. when you make a revocable living trust, you name yourself as the trustee and name a family member or someone else as the successor trustee. if you can no longer manage trust assets due to hospitalization or extended absence, control over those assets automatically shifts to your designated successor trustee.
finally, an irrevocable living trust also works as an asset protection tool. once assets are transferred into the trust they are typically beyond the reach of creditors. keep in mind, however, you cannot modify the trust once it is established, meaning the trust assets also remain outside your control.
what estate planning documents and tools can help with avoiding probate?
the key to avoiding probate is to avoid owning assets subject to probate at the time of your death. assets held in a living trust are considered non-probate assets, so transferring assets into a trust is an excellent way to avoid probate.
another method to avoid probate is to convert bank and financial accounts, and even vehicle titles in some states, to payable on death (pod) or transfer on death (tod) accounts and titles. this lets you name a beneficiary who inherits the account or asset immediately upon your death. the named beneficiaries, however, have no ownership interest in the assets while you are alive.
for real estate, titling the property as joint tenants with rights of survivorship can accomplish the same goal. upon your death, your ownership interest in the property automatically transfers to the co-owner(s) without going through probate. unlike pod and tod designations, however, joint tenancy gives the co-owner a legal ownership interest in the property during your lifetime. other assets, such as retirement accounts, iras, and life insurance policies, also pass directly to the designated beneficiary outside of probate.
if probate cannot be avoided, a letter of instruction can help the process run smoothly. a letter of instruction is not a legally binding document. instead, it offers you the opportunity to provide instructions and information not found elsewhere in your estate plan to your executor or beneficiaries. a letter of instruction can help if your estate includes complex assets or you made controversial or unexpected distributions in your will or living trust that could lead to legal challenges.
whether you establish a will or a living trust or both, 2022世界杯32强抽签时间 can help you with estate planning. if you have more questions about planning your estate to minimize or avoid probate, reach out to a 2022世界杯32强抽签时间 network attorney for affordable legal advice.
this article contains general legal information and does not contain legal advice. 2022世界杯32强抽签时间 is not a law firm or a substitute for an attorney or law firm. the law is complex and changes often. for legal advice, please ask a lawyer.
