06 May When A Loved One Dies, Part II: With A Will
There are three legal situations that you may find yourself in when a loved one dies and it all depends on the type of planning they did. For the purposes of this article, we will call the loved one that has passed the “Decedent.”
First. The Decedent died without doing any estate planning.
Second. The Decedent died with a Will in place.
Third. The Decedent died with a Will and a Living Trust in place.
This article focuses solely on what happens when your loved one dies with only a Will in place.
Most people believe that when they create a Will, they will avoid probate. THIS IS NOT TRUE.
If the Decedent died with only a Will in place, their estate will still have to go through an administrative process known as “probate.” The Decedent is considered to have died “testate” which simply means with a Will. Rather than distributing the assets according to state intestacy laws, the court will follow the wishes of the Decedent in the Will. The Court will still appoint a person to be in charge of the probate and go through the entire process including requiring publication, notices, etc. So, although your loved one’s Will determines who will inherit their estate, the court will still be involved in the process, which means unnecessary time and expenses. Click here to read about the costs associated with Probate.
A Will is the basic starting point for a comprehensive estate plan. The main thing it accomplishes is to dictate who gets what and nothing more. It merely replaces intestacy laws that a judge must follow when your assets are distributed. A Will should be the starting point and not the one and only planning that is done.
For example, Bob has created a Will and nothing more. At his death, his family has to open a formal probate proceeding to administer his estate. They will have to ask the judge to appoint a person to be in charge. If Bob has not left instructions for whether the executor of his estate can serve without a bond, the court may require his executor to post a bond before being appointed as the person in charge. This could cost hundreds if not thousands of dollars depending on the credit of the executor and the value of the estate. As is evident, there are key components of a Will that the average person may not be aware of. These missing vital components can cost the estate money leaving less for loved ones to inherit. It is always best to consult with an attorney, even if your goal is simply to create a Will and nothing more.
To read more about Wills, click here.
To read more about Living Trusts, click here.
To read more about What Happens When A Loved One Dies Without A Will, click here.
Check back next month to read about what happens when a loved one dies with a Will and Trust in place.