Estate planning is something that many people do not know much about. For some reason we tend to avoid the subject of death in our society, but at the same time we all recognize it is one of the certainties of life. It is important to plan ahead for this inevitability, and you should start doing so as soon as you are a self-supporting adult.
The typical estate plan is going to include a vehicle of asset transfer. A simple last will is an option here. With a last will you express your final wishes in writing. You name an executor in your will who will carry out the administrative tasks that must be completed after your passing.
The executor is going to be guiding the estate through the process of probate. The assets that comprise your estate are not just immediately distributed to your heirs. Your estate must first be probated, and this process takes place under the supervision of the probate court.
You may have heard of will challenges. A will challenge is when someone steps forward to contend that the will that has been presented to the court is not valid. Anyone who wants to challenge a will would present an argument before the probate court.
Any outstanding debts must be paid during probate. This would include tax responsibilities. Property must be inventoried, and in some cases liquidated so that its value can be spread around among multiple heirs.
Because of the above, the executor will oftentimes engage an accountant, a property appraiser, estate liquidators, and a probate attorney to help navigate the process. All of this costs money, and the executor is entitled to payment as well. All of these probate expenses can add up considerably.
As you might imagine, probate can be time-consuming given all the tasks that must be handled. In the simpler cases, it can take a number of months, and some complicated cases are stalled in probate for years.
Because of this loss of time and money, people often look for ways to arrange for future asset transfers outside of probate. One way that you could do this would be to convey assets into a revocable living trust.
To break it down to its simplest form, the trustee that you select when you create the trust manages the financial resources after you pass away. The trustee makes monetary distributions to the beneficiaries, and this is done in accordance with your wishes as they are stated in the trust agreement.
It should be noted that you retain control of the assets while you are alive and well.
These are just two of the numerous different legal devices that are used in the field of estate planning. If you would like to learn more, contact our firm to request a free consultation.