HAPPY OCTOBER!

October is Special Needs month. It is also breast cancer awareness month.

Make sure your estate plan includes a stand-by special needs trust. You never know if or when one of your loved ones may become disabled, but your stand-by plan will be able to take care of them.

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“Testate” Probate Versus “Intestate” Probate

Asset distribution is a central task of both “testate” probate and “intestate.” Testatestate probate is available when the decedent has executed a valid last will and testament. Conversely, an “intestate” probate is the default when the decedent died without a valid last will and testament.

In most states, probate is required when someone dies, leaving an asset or assets not titled to a trust or for which there is no surviving joint owner and no designated beneficiary. Consider such asset or assets “orphaned” with no living owner. Consequently, probate is required in the state where the decedent was last a resident to find a new owner for any orphaned assets left behind.

How does “testate” probate work?

First, a petition is filed with the probate court, which reviews the last will and testament to ensure that it is the “last will” and testament and that it satisfies the particulars required under state law to be valid. Once the Court accepts, the Court issues a “letter testamentary” to the executor appointed under the last will. This document empowers the executor to begin paying just debts, taxes, and expenses of the estate and, ultimately, to distribute and manage assets according to the terms of the last will.

Once filed with the probate court, the last will and testament and any related documents become part of the public record. Anyone can request and view these documents, including creditors, salespeople, and thieves. This is why vulnerable surviving spouses are contacted by third parties promoting their professional (and less than professional) services. Scammers also use court documents to identify potential victims.

Probate also requires the executor to notify people named in the last will and lawful heirs not named in the previous will. Each of these parties can also obtain a copy of the last will from the Court. Consequently, state probate statutes provide for a period of time for disgruntled heirs to challenge the previous choice.

What happens if a person does not have a will but they do have an estate?

Without a last will, “orphaned” assets still require probate before distribution. With no last will appointing an executor chosen by the decedent, the probate court appoints an estate administrator to fulfill that function. This person may be a professional administrator who never knew the decedent or the family of the decedent.

The estate administrator follows the state laws of intestate succession.

The administrator of an “intestate” estate has the same responsibilities as the executor in a “testate” estate. However, since the decedent did not create a last will to provide instructions regarding the estate distribution, the intestate estate passes according to state law. In most states, this one-size-fits-all distribution formula is based on the degree of kinship to the decedent. If a surviving spouse has no children, then the spouse inherits everything. If there is a surviving spouse and children, the spouse and children share the inheritance.

Failing to have the last will leaves the family open to many challenges.

Without a last will, the family cannot control how assets are distributed. A last will is also used to name guardians for minor children. Therefore, if there is no last will and no surviving spouse, minor children will be assigned a foster family until long-term placement can be made.

What if you want to avoid probate over your altogether? Consider creating a fully-funded revocable living trust with a trustee of your own choosing to manage the trust assets privately and confidentially for your beneficiaries. An experienced estate planning attorney can help you select the right estate plan for your unique circumstances now and keep it up to date since changes inevitably occur.