People are always told from financing advisers, articles, the media and magazines that good financial management of personal assets also includes estate planning. However, the actual details of estate planning are often skimmed over. As a result, many folks don’t do anything about it because they don’t want to start up a new financial activity blind. Fortunately, estate planning is not a bad thing. The more one knows about, the better financing decisions he can make for the long run.
Estate Planning Defined
The process of estate planning, whether it is setting up a basic will or crafting a family trust, is the process of identifying all of one’s assets and whom they should go to if and when a person passes away. People who receive that property, whether they be children, family or friends, are known as beneficiaries, and they all have to be named and specifically mentioned in a legal document spelling out who gets what. Legal documents are often in the form of wills and trusts.
Why Does it Matter?
When a person passes away all their belongings, accounts and interests are grouped together in what is called the person’s estate. That estate doesn’t automatically sit up for grabs. The break up or treatment of the estate has to follow a legal process. In the U.S. that process is called probate, which is a formal court process and hearing that finalizes how an estate will be treated. Normally, the court will treat an estate as it is spelled out in the dead person’s will (ergo why the document is so important). Where there is no will, the court will then make the decision on what it sees from parties and estate information about who gets what.
How to Avoid Probate
A probate process can be expensive, and that cost will come out of the estate when everything is settled. Further, even with a will, probate can still cause property to go someone different than who was mentioned in will. This could be the court’s decision or because a third party protested the will and said it was done wrong or unfair. To avoid this problem altogether, people can use a trust.
A trust transfers ownership of the property while a person is alive to a new legal entity under the control of that person. When the person passes away, the trust automatically changes ownership of the defined property to the named beneficiary. Because the ownership is instant and is not the person while he was alive, there is nothing that goes to probate as part of the estate. The right beneficiary gets the property, and the courts generally leave trusts alone as private matters defined before a person died.
Getting More Information
For those looking for a Washington state wills attorney, a good Renton estate lawyer with deep experience in estate planning is Attorney Gary Schuetz. His knowledge and skill in estate planning has helped dozens of clients ensure their last finances are handled correctly.