A t the time of their death, most people leave behind some assets and carry some debt, both of which effectively make up their estate. Some manage to have a Will drawn before their deaths, while others pass on without having even consulted an attorney for help in estate planning.
However, whether or not the deceased has a Will, these assets and liabilities need to be effectively managed and distributed and that’s where the probate court system comes in.
Probate is the process by which Courts permit the wrapping up of the final affairs of a deceased person, including resolution of creditor claims and distributing assets to the persons entitled to them. These proceedings can range in complexity depending on the types of assets owned by the decedent, the claims brought by creditors, disputes over the authenticity of a Will that could lead to probate litigation, and the determination of the rightful heirs, among other things.
The entire probate process, however, can be avoided if the deceased has a Trust set up before his or her death. Ideally, if done right, Trusts are an effective and efficient manner of winding up a deceased trustor’s affairs. However, the trust must be administered correctly not only to settle the affairs of the decedent but to avoid any tax penalties and other issues as well. Failure to do so could result in the estate unnecessarily incurring fees and property taxes.