subject: Overview of Inheritance Law, Probate and Trusts [print this page] Overview of Inheritance Law, Probate and Trusts
Inheritance law refers to laws surrounding assets owned by individuals who have died. Governed under the Uniform Probate Code since 1969, inheritance law governs how property is distributed if decedents die without executing a last will and testament, along with estate settlement procedures.
At present, UPC inheritance law has been adopted in entirety by 18 states, while the remaining 32 states have adopted part of the probate codes. Estate administrators in charge of settling probate estates must adhere to specific protocol. Therefore it is strongly recommended to work with a probate lawyer to ensure compliance.
While inheritance probate laws vary by state, most follow similar protocol. An estate administrator must be designated to settle the estate. This can be done through the last will and testament or a trust. When individuals die without having a Will in place, it is referred to an intestate estate. Administrators of intestate estates are appointed through probate court.
All estates within the U.S. must undergo probate unless assets are protected through a trust. Some states do not require small estates, usually valued below $25,000, to undergo the probate process.
Settling estates through probate can be a time-consuming process, especially if decedents did not incorporate estate planning strategies. Intestate estates can drag on for months while the courts determine rightful heirs.
Inheritance property normally transfers to the decedent's spouse, if one exists. However, the court must abide by inheritance law to ensure property is appropriately distributed. This can prolong probate by several months, particularly if anyone places a claim against the estate.
To minimize the process of probate, individuals should execute a legal Will. There are several ways to accomplish this. Much depends on the type of property owned, who will receive it, and the value of estate assets. It is best to consult with a professional estate planner or probate lawyer to determine which strategies are best suited for your needs.
The only way to avoid probate is to transfer assets into a trust. Several types of trust exist and each can be structured to suit your needs. Establishing a trust requires the services of an estate planner or lawyer. Trusts are normally reserved for estates valued over $100,000.
Inheritance property protected by a trust is not considered part of the estate and exempt from probate. Trusts are managed by a Trustee and assets can be quickly transferred to designated beneficiaries upon death. Oftentimes, proceeds from trusts are exempt from inheritance taxes.
People often procrastinate about writing a last will and testament. While no one enjoys thinking about who will receive their belongings when they die, it is important to engage in estate planning. Otherwise, decisions will be left to the court and your loved ones will be left picking up the pieces and may not receive one thing you would want them to have.
Probate lawyers and estate planners can help make the process easier and offer advice about the various options available. They can help execute a last Will or trust to ensure loved ones receive your legacy while abiding by inheritance law.
