Probate is a legal process overseen by a probate judge that occurs after someone passes away. During probate, the court determines whether a will exists, and if there is a will, whether or not it is valid. Then, it is determined how the deceased’s outstanding debts and taxes will be paid. Finally, the judge outlines how the remaining assets and wealth in the estate will be distributed to the beneficiaries based on the instructions described in the will.

Most estates go through probate, with the exception being if the deceased formed a trust. The presence of a will does not avoid probate, but it can make the process move quickly and easily. If someone passes away without a will, the court follows intestacy laws to determine inheritance.

A trust puts control of assets and wealth under the control of a trustee. The person who creates a trust is called the trustor. The trustee is responsible for following the trustor’s instructions, distributing payments to beneficiaries, and protecting the value of the assets within the trust.

The benefits of forming a trust include avoiding probate, minimizing taxes, protecting the value of assets, monitoring wealth for heirs, and shielding assets from creditors or civil claims. There are two main types of trusts: revocable and irrevocable. Revocable or living trusts can be amended by the trustor; however, irrevocable trusts can not be changed once they are formed. Within these primary categories, there are specific types of trusts designed to address unique situations such as providing financial security for individuals with special needs and charitable support.

If a person dies without a last will, they are considered to have died intestate. After paying the deceased’s outstanding debts, a judge decides how any remaining wealth or assets will be divided among eligible heirs. State laws name beneficiaries as spouses and children, but if the deceased did not have any immediate family, other relatives or dependents may be considered eligible. The judge will also name an administrator of the estate to facilitate debt and tax payments as well as the distribution of benefits.

When someone dies in intestacy, the process to settle their estate takes much longer. Without a will to follow, the wishes of the deceased are not factored into how the judge rules on the division and distribution of their legacy. This lack of control often leads to family disputes and other complications.

There are several tax implications when a business is passed down to beneficiaries after death. The amount of taxes owed depends on the value of the business. However, in many circumstances, capital gains tax is applicable. There are many estate planning solutions that address business succession and minimize taxes for heirs, such as trusts, buy-sell agreements, gifting shares, and valuation strategies. If you own a business, it is imperative to meet with our business and estate planning attorneys to determine the best way to pass down your business while protecting the legacy you have spent your whole life building.

Estate planning is the process of formally assigning how your assets and finances will be handled or distributed after you pass away or become incapacitated. In addition to listing beneficiaries, it includes outlining your health directives, guardianship of your children, funeral plans, and other important instructions. Common estate planning documents are a will, various types of trusts, and a power of attorney.

Proactive estate planning benefits you and your family by minimizing stress and confusion over your final wishes and preventing disputes between your loved ones. Our estate planning attorney can also advise how to maximize the value of your estate and protect your legacy through tax preparation, medicaid planning, probate avoidance, and more. Without an estate plan, the distribution of your assets and wealth is left in the hands of the court system, and heirs may not receive the inheritance you intended.