What is a Will

What is a Will?

Most people understand the necessity of having a last will. Even if you're young and just starting out, you have some assets, so it's important to have a last will. As you acquire more assets or start a family, the importance of having a will grows.

Financial and legal experts recommend basic estate planning for everyone, but there are many misconceptions about how wills and other estate planning documents work. Don't let unfamiliarity stop you from properly planning your estate. Here are some frequently asked questions—and their answers—to better acquaint you with the estate planning process.

Q: What happens if a person dies without a last will?

When a person passes away without a last will, the person's assets are probated or passed through the courts for distribution according to the laws of intestacy. In other words, the deceased person's assets will be distributed according to the laws of the state—not necessarily according to the deceased's wishes.

The laws of each state vary, but the money and other assets typically pass to the spouse first. For example, in California, all the property acquired during the marriage passes completely to the spouse. Any property acquired before the marriage or inherited is split between the spouse and any children.

If a person dies without a living spouse, the estate passes to the children, if any, equally. If there are no children and no spouse, but living parents, the estate passes to the parents. Generally, the state will attempt to find any living relatives and pass the estate to them.

In the event that there are no blood relatives, the estate passes entirely to the state.

Q: What happens after someone who has a last will passes away?

The probate court disposes of the assets in accordance with the last will and the law.

Q: Does a person have to have a minimum amount of assets to create a last will?

No— a person can create a last will to dispose of assets worth $10 or $10 million. Of course, the distribution of those assets can have tax implications. For that reason, it is important that you understand how inheritance will be taxed as you make your estate planning decisions. It is often wise to consult with estate planning professionals, especially for large or complicated estates.

Q: What is the difference between a living will and a last will?

The basic difference is that a last will is used to dispose of assets after death. A living will can be used to provide health care instructions in advance, such as whether or not life support is desired.

Q: What are the main benefits of a living trust vs. a last will?

A last will's main benefit is its simplicity. Anyone can write a last will. The drawback is that your family members may have to wait months or even years until your property goes through the courts and is distributed.

A living trust, on the other hand, can be used to transfer property and assets to beneficiaries without going through the probate process. This can save years of time and thousands in fees. Also, it keeps your estate private, whereas a last will, once probated, will become public record.

People often use a last will and a living trust together. A last will can be used in conjunction with a living trust to name guardians for minors and express final wishes not otherwise captured in a living trust.

How do I decide what's best for me?

As you can see, wills are not necessarily complicated. They are actually among the simplest legal documents. Whether or not a will is wholly adequate for your estate planning needs depends on your individual circumstances. If you're unsure what you need to protect your family, consult a lawyer. The most important thing is that you don't neglect planning your estate. It's the best way to protect your loved ones and make sure your assets are distributed according to your wishes.

What is Probate

What is Probate

What is Probate?
Author(s): B. Kaiser

Probate is the legal process through which a deceased person's estate is properly distributed to heirs and designated beneficiaries and any debt owed to creditors is paid off. In general, probate property is distributed according to the decedent's last will and testament, if there is one, or according to state law if no will exists.

What Is Involved in Probate?

Probate involves several basic steps:

1. Someone is appointed to administer the estate. If there is a will, the administrator is usually named in the will and is called an executor. If there is no will or no executor named in the will, the probate court appoints someone of its choice.
2. The will is proven in court to be valid. State law governs the probate process, so it is important to follow state requirements for signatures, witnesses, and/or notaries to be certain your will is valid.
3. The deceased person's property is identified and inventoried. Most assets cannot be sold or distributed until the probate process is complete.
4. Properties are appraised.
5. Any debts or taxes owed by the deceased are paid.
6. The remaining assets are distributed according to the decedent's wishes if there is a will, or according to state law if there is not a will.

What If There Is No Last Will and Testament?

If there is no will, or if some of the estate's assets have no designated beneficiary, it is through the court-supervised probate process that the remaining assets will be distributed. The probate process also allows individuals to challenge the will, in which case the court decides the appropriate beneficiary of the assets in question.

How Long Does the Probate Process Take?

According to the American Bar Association, the probate process, on average, is completed six to nine months after a probate case is opened with the court. This can vary depending on the court and may take years if there are disputes over legality of the will or distribution of assets. In addition, there may be costs associated with the probate process (such as court fees), the responsibility for which may land on the executor of the decedent's will if they cannot be paid by the estate. For these reasons, many people get a living trust, which can help avoid probate and reduce the time it takes to settle an estate.

What Property Is Not Included in Probate?

There are some types of assets that do not enter probate (called non-probate assets), such as life insurance policies that designate a beneficiary or bank accounts with a "payable upon death" beneficiary specified as part of a legal contract. Real estate held in joint names with rights of survivorship can bypass the probate process as well. You can make almost all of your assets non-probate if you place them into a living trust,

Probate laws vary by state, and it is not always necessary for an estate to enter the probate process upon someone's death. One of the aims of estate planning is often to avoid the probate process in order to have assets distributed to heirs in a timely manner. Talk to your lawyer or estate planning professional if you need help determining the steps needed to ensure appropriate distribution of your estate after your passing.