Perhaps the worst decision we can all make is to die without leaving a valid Last Will & Testament. That is to die Intestate if you own more wealth in the form of property, possessions and financial products than the debts you owe. The inheritance of your Estate Assets are then distributed according to the law as assigned by Probate Court, rather than to whom you might have chosen to Will them to. In the worst case scenario if there are no persons legally qualifying, that remain alive, your assets could belong to the State.
The passing of someone close to you is a difficult and emotionally draining time. The last thing you likely want to deal with is the business of settling your loved one’s final affairs. With the help of a trusted advisor, the process may not be as bad as you might think.
Probate is the legal process through which the final debts and taxes of a deceased person are paid, and through which that person’s remaining property is distributed. If the deceased person had a will, then the probate process involves verifying that the will is valid, officially appointing the executor, and providing a framework for the executor to inventory the assets of the deceased, pay valid claims made against the estate, and distribute the remaining assets to the beneficiaries as provided by the will.
If the deceased had no estate plan at all, called dying intestate, then the probate process is slightly different. An administrator is chosen for the estate, and the administrator makes an inventory of the assets of the estate, pays the claims against the estate, and then follows the provisions of state law to distribute the remaining assets to the heirs of the deceased.
Setting up a living trust, a key step in establishing a formal estate plan, is the best way to avoid the costs and frustrations of probate upon death. Although administering a trust is far easier and less expensive than a probate action, there is always some administrative burden upon death.
If you serve as a trustee of a trust or as a personal representative of a decedent’s estate, you face many complicated responsibilities. The estate planning attorneys at Morris Hall help address any issues that may arise in the course of trust administration or probate. Upon death, the following taxes may come into play: estate tax, inheritance tax, income tax, capital gains tax, generation-skipping tax and excise tax. If the administration of your trust is handled correctly, we can minimize or even avoid those taxes.
This article should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.
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