- What is Probate?
- What is Joint Tenancy with Rights of Survivorship?
- What is a Will?
- What is a Living Will?
- What Does Intestacy Mean?
- What are Beneficiary Designations?
- What is a Durable Power of Attorney and When do I Need one?
- What is a Revocable Living Trust?
- Who Should Have a Revocable Living Trust?
- Is your Estate Plan Out of Date?
- What are the Ways to pay for Long-Term Care?
Probate and estate administration are the processes through which estate assets are transferred after death. When appropriate probate avoidance planning has not been implemented prior to death, probate court proceeding may be necessary if the deceased was a resident or owned assets in the state. Probate can be dependent (supervised) or independent (unsupervised). In an unsupervised probate, the independent executor manages assets, pays any debts, files required tax returns and various court documents, and distributes the estate assets. However, in certain circumstances the court may at any time require the process to be supervised (usually when someone expresses concern about the estate administration). In a supervised probate, the probate judge must approve every significant detail of the estate administration.
Wills still HAVE to go through probate in order to distribute the estate to beneficiaries.
Guardianship is the court process that looks after people who cannot make their own personal, health care and/or financial decisions. These people fall into two general categories: Minor Children (under age 18 in most states) and Incapacitated Adults.
Probate proceedings can be expensive and time-consuming. Additionally, the court proceeding and associated documents are all a matter of public record. Many people choose to avoid probate in order to save money, spare their heirs a legal hassle, and keep their personal affairs private.
This is a common form of asset ownership between spouses. Joint tenancy has the advantage of avoiding probate at the death of the first spouse. However, we often suggest the surviving spouse not add the names of other relatives to their assets. Doing so may subject their assets to loss through the debts, bankruptcies, divorces and/or lawsuits of any additional joint tenants. Joint tenancy planning also may result in unnecessary death taxes on the estate of a married couple.
The document a person signs to provide for the orderly disposition of assets after death. Wills do not avoid probate. Wills have no legal authority until the willmaker dies and the original will is approved in Probate Court. Still, everyone with minor children needs a will. It is the only way to appoint the new "parent" of an orphaned child. Special testamentary trust provisions in a will can provide for the management and distribution of assets for your heirs. Additionally, assets can be arranged and coordinated with provisions of the testamentary trusts to avoid death taxes.
Sometimes called an Advance Medical Directive, a living will allows you to state your wishes in advance regarding what types of medical life support measures you prefer to have, or have withheld/withdrawn if you are in a terminal condition (without reasonable hope of recovery) and cannot express your wishes yourself. Oftentimes a living will is executed along with a Medical Power of Attorney, which gives someone legal authority to make your health care decisions when you are unable to do so yourself.
Intestacy means dying without a will. If you die without even a will (intestate), the legislature of your state has already determined who will inherit your assets and when they will inherit them. You may not agree with the state’s plan, but we understand that over 50 percent of Americans currently use it.
You may avoid probate on the transfer of some assets at your death through the use of beneficiary designations. Laws regarding what assets may be transferred without probate (non-probate transfer laws) vary from state to state. Some common examples include life insurance death benefits, retirement accounts, and bank accounts.
These documents allow you to appoint someone you know and trust to make your personal health care and financial decisions even when you cannot. If you are incapacitated without these legal documents, then you and your family may be involved in a probate proceeding known as a guardianship (called conservatorship in some states). This is the court proceeding where a judge determines who should make these decisions for you under the ongoing supervision of the court.
This is an agreement with three parties: the Trust-makers, the Trustees (or Trust Managers), and the Trust Beneficiaries. For example, a husband and wife may name themselves all three parties to create their trust, manage all the assets transferred to the trust, and have full use and enjoyment of all the trust assets as beneficiaries. Further "back-up" managers can step in under the terms of the trust to manage the assets should the couple become incapacitated or die. Special provisions in the trust also control the management and distribution of assets to heirs in the event of the trustmaker's death. With proper planning, the couple also can avoid or eliminate death taxes on their estate. The Revocable Living Trust may allow them to accomplish all this outside of any court proceeding.
Whether you are young or old, rich or poor married or single, if you owned titled assets such as a house and want your loved ones to avoid court interference at your death or incapacity, consider a revocable living trust. A trust allows you to bring all of your assets together under one plan.
Is your Estate Plan Out of Date?
What are the Ways to pay for Long-Term Care?