Estate planning probate references strategies implemented to protect inheritance property. Probate is a court supervised process used to validate last wills or establish rightful heirs when decedents die intestate (without a will).
Many Americans procrastinate about estate planning probate; especially when they are young and in good health. Unfortunately, death can occur without warning at any age. Dying intestate can create unnecessary burdens for loved ones. These burdens can be avoided by executing a last will or establishing a trust.
Executing a last will and testament is relatively simple and can be achieved through various means. Most people hire a probate attorney or estate planner. These professionals offer guidance and advise on inheritance property protection and can determine which strategies are best suited for your needs.
It is important to understand everything you own is transferred to probate unless asset protection strategies are implemented. The probate process generally extends for six to nine months, as long as complications do not arise.
During this time the probate executor is responsible for settling outstanding debts, maintaining real estate holdings, preparing and submitting documents for transfer of monetary assets, and various other duties.
Last wills must be validated by a judge to ensure inheritance property is distributed according to probate laws. When individuals die intestate, assets are usually distributed to the surviving spouse or direct descendents such as parents, siblings or children.
Inheritance property can depreciate while held in probate. Add in legal and estate management fees and financial assets can quickly be depleted. If the estate does not possess the financial means to pay debts, a judge can order the estate administrator to sell assets and use proceeds to pay creditors; leaving nothing for designated beneficiaries.
Several estate protection strategies exist to avoid probate. Estates valued below $50,000 are considered small estates in many states and might be exempt from probate. Since probate laws vary by state it is important to consult with an estate planning lawyer.
Estates valued over $100,000 should consider establishing a trust. Several types of trusts exist including irrevocable and revocable trusts and irrevocable life insurance trusts. Transferring inheritance property to a trust avoids probate altogether and maintains estate privacy.
Last wills are a matter of public record, while trusts are private. Wills protected by a trust can only be viewed by designated heirs and beneficiaries. Property held in trusts is oftentimes exempt from inheritance taxation.
Estate planning is not a difficult task. The only requirement is to create a list of assets and who you wish to receive them in the event of your death. However, estate planning is an ongoing process. Wills and trusts need to be updated with major changes occur.