What is Probate?
Probate is a necessary process to transfer a decedent’s (person who has died) property to his/her distributees (heirs, devisees, creditors, etc.) after (s)he has died. This process is performed under the supervision of the court and an appointed personal representative. Creditors are given the opportunity to come forward and be paid out of the estate proceeds, and the rest of the estate property is transferred. There are certain expenses associated with the probate process such as: bond premiums, publication costs, courts costs, and personal representative and attorney’s fees. Since the probate process is performed within court, it is a public process and distribution of property to surviving family members is governed by the law.
What is a Will?
A will is a legal document that lays out who will receive your property when you die. A will does not avoid the necessity of the probate process, and in fact it must be “probated” to have legal effect.
So why have a will if I still have to go through probate?
Creating a will has several benefits over dying without one. A will can help you save costs by waiving certain fees associated with probate. A will also allows for you to appoint an independent personal representative apart from the court. Rather than the court determining who receives your property after you die (according to the law), you can make those decisions in your will and give your property to whomever you wish. Finally, by creating a will you can ensure that you have taken care of your surviving family.
What is a Trust?
A trust is a written agreement that determines how an individual’s property is to be managed, disposed of, and distributed during his/her lifetime and after (s)he dies. Trusts come in all shapes and sizes, but most often when we hear trusts talked about as part of estate planning we are referring to “revocable living trusts.”
A revocable living trust typically involves three parties:
- Settlor– The person (or persons) who create the trust, and fund the trust.
- Trustee- The person (or persons) who are responsible for administering and managing the property in the trust.
- Beneficiary-The person (or persons) who receive the benefit/proceeds of the trust.
Often times when a revocable living trust is created the settlor, trustee, and beneficiary are the same person (at least during the settlor’s lifetime). The reason this type of trust is popular is because the settlor has the right to amend (or dissolve) the trust during his/her lifetime.
It should be noted that although a trust may be the primary estate document, it should also be accompanied by a will.
Why should I create a trust if I still have to create a will?
Even though trusts are typically more complicated than wills and require the settlor to do a bit more work before his/her death, there are still several benefits to a trust. The biggest benefit (to many people) is that a trust can allow you/your family to avoid probate. A properly drafted and funded trust can distribute all of your property through its direction rather than go through the probate process. This also maintains your (and your family’s) privacy since it keeps the estate out of court. A trust also allows for you to plan every aspect of your property distribution prior to and after death. Creating a trust can give you complete peace of mind knowing that your wishes are set forth and your family is taken care of.
RS Campbell Law, LLC is here to help guide you through the estate planning process. We will work with you and listen to your needs to help you choose an estate plan that ensures your wishes are set forth and family is provided for. Contact us today to set up a consultation.