The estate planning process is done to try and make the process of probate easier for your family after you have passed on. The easiest way to handle probate is to create a trust and have your estate distributed through the trust. A trust does not go through probate, which makes it a faster and more effective way to pass on your wealth and property to your family.
If all you have is a will when you pass away, or if you never took the time to develop a will, then your estate will go through probate. When you pass away, your executor will be in charge of compiling your estate and then abiding by your final wishes. If you have left no final wishes, then the courts decide where your property goes. Probate is long and complicated process, and you should be aware of a few parts of the process that could affect how your family is treated after you pass on.
Probate cannot end until your executor can compile all of your debts and assets. This process takes long enough under ideal situations, but it can really take forever if you are not a neat record keeper. As part of your estate planning, you should devise a way to keep all of your records accessible and prevent the initial part of probate from taking years.
In most cases, the probate court will take care of cash distributions before moving any property. For example, your estate's debts will get paid before any family member gets an inheritance. The court will also dole out any cash contributions you outline in your will before giving away property.
If you want to make cash contributions to your local church after you have passed but all you have is a large stamp collection, then the court will order the collection appraised and sold to meet your contribution requirements. It does not matter if you left that stamp collection to your brother in your will. If the court has to sell assets to meet obligations, then it will.
If you were a prime source of financial support for your family and your estate contains cash your family needs to survive, then your family can petition the probate court to release support funds. These are small amounts of money the executor of your state is allowed to distribute to family members as needed before the actual finalization of probate occurs.
In the movies, a person dies and their will is almost immediately read by their attorney. After the will is read, the people who inherited a portion of the estate get their portion before the end credits roll. In real life, nothing could be further from the truth.
Real probate, in most states, can take a minimum of several months. Every state has its own laws when it comes to probate, and the requirements of the court must be met before probate can be finalized. Remember that if your family hires an attorney to handle the probate process, then that attorney must be compensated. Another little detail the movies leave out is that the probate lawyer always gets paid.
The probate process occurs when an estate is structured without a trust or any other mechanism for avoiding probate. The more work you do to organize your probate process before you pass away, then less your family has to worry about when the time comes to
handle your estate.