Surprisingly, a substantial number of Americans do not have an estate plan. Furthermore, studies point to the number of adults under age 35 as the worst of all, with over 90% not having an established estate plan.
Regarding estate planning, lawyers often share that, “Everyone has an estate plan whether they know it or not. If you don’t create one for yourself, the state you live in will create one for you.” In other words, this means that if you draft and create your own plan, then the state where you reside will determine where your assets will go upon your death. Your family members will have no choice but to comply. This situation is called intestate succession.
Everyone, young or old, should avoid intestate succession by having a Last Will and Testament. A Durable Power of Attorney and an Advance Health Care Directive are two other documents that every individual should consider possessing.
What is a Last Will and Testament?
A Last Will and Testament is a legal document that outlines who you wish to inherit your assets upon your death. In your will, you name an Executor to administer your estate. You can also name a guardian for any minor children that will need care after your passing. Moreover, you can nominate a pet guardian for any animal companions that may need care when you are gone.
A will is the most basic form of estate planning. When you have a Last Will and Testament, you can choose who is going to inherit your assets. However, even if you have a will, your assets are still subject to a court proceeding called “probate” for these assets to pass to your heirs.
Almost everyone leaves behind some assets that don’t need to go through the probate process. If a probate court proceeding is conducted for an estate, not everything must be included. Property that doesn’t have to go through the probate process can be transferred to the individuals who are meant to inherit it much more quickly.
These Common Assets Go Through Probate
Probate is necessary for a property that was:
► Solely owned in the name of the deceased person. For instance, a piece of real estate deeded or a car titled in that individual’s name alone.
► A “tenants in common” share of property owned. For instance, the deceased person’s interest in a startup owned with his or her son as an investment.
This is commonly called the probate estate. If assets exist that require probate court proceedings, the executor named in the will is responsible for opening a case in probate court and see it through to its conclusion. If an individual dies without a will, or the will doesn’t nominate an executor, the probate court appoints someone to serve that function. The person in charge of the will can hire an estate planning attorney to help them navigate the probate court proceeding, and the lawyer’s fee is paid from money in the estate.
If you don’t have an estate plan, your beneficiaries may have to work through the legal red tape on their own, something that may be more challenging for them while they mourn your loss. This can be avoided by contacting a living trust lawyer from a law firm like Kamper & Estrada, PLLC. to help you with planning your estate.