Estate refers to all property owned by a person who is deceased. Upon death, these assets are secured through a process known as probate and cannot be distributed to heirs until specific protocol is followed.
When estate assets are protected by a trust, distribution occurs quickly because all property transferred into trusts avoid probate. Trusts are normally reserved for estates valued over $100,000. However, individuals with smaller estates can engage in estate planning strategies to keep certain types of property out of probate.
Decedent estates can consist of real estate, business assets, motor vehicles, financial accounts, household furnishings, jewelry, artwork, and personal belongings. Individuals bequeath property to heirs using a last will and testament.
The Will is an essential element with both trusts and probated estates. This legal instrument is used to provide estate settlement directives, bequeath inheritance property to heirs, disinherit heirs, and establish guardianship for minor children.
When decedents die without executing a last Will their estate is referred to as ‘intestate’ and must be settled according to state probate laws. In most instances, inheritance property is given to the surviving spouse and direct lineage heirs. All others who feel they are entitled to specific property are required to file inheritance claims against the estate.
Settling intestate estates is oftentimes more complicated than settling estates protected by a Will or trust. When probate is required, a personal representative is appointed to manage the estate. Required duties will vary depending on estate value and types of inheritance property.
Heirs can contest the Will if they feel entitled to items that were not gifted to them by decedents. This can be costly to all parties involved. Individuals who contest Wills are responsible for their legal fees, while the estate is responsible for defense legal fees. If the court rules in favor of the Plaintiff, the estate might be required to reimburse the Plaintiff and vice versa.
Contesting a Will rarely accomplishes anything more than lining the pockets of probate lawyers. If family strife occurs during probate, personal representatives may need to retain the services of a probate litigation attorney. These attorneys can often negotiate with heirs and prevent them from contesting decedents’ Wills.
Several strategies exist to avoid probate. These can include assigning beneficiaries to bank accounts, financial portfolios, and retirement accounts, as well as assigning property rights to titled property such as real estate and automobiles.
The best way to ensure property is protected and will be gifted to those you choose is to work with a professional estate planner or probate attorney. At minimum, everyone age 18 and over should execute a last will, create a healthcare proxy, and grant power of attorney rights.
Healthcare proxies are used to express the type of medical care you do or do not want if tragedy strikes. Individuals diagnosed with terminal illness and the elderly often establish a living trust to include ‘do not resuscitate’ orders. Most people prefer to not think about these matters, but planning for unexpected tragedies will ensure your healthcare desires are granted.
Power of attorney is used to grant authority to another person to make decisions on your behalf if you are unable to speak for yourself. Careful consideration should be given before granting POA rights. The person should be capable of making difficult decisions and comply with your wishes.
Probate lawyers and estate planners can help make the estate planning process easier by providing guidance and offering suggestions. These professionals can help determine if you should protect assets using a last Will or transfer property to a trust. They can provide advice regarding appointing personal representatives, establish a living trust, and explain all available options to protect your estate upon death.