Estate law doesn’t seem like the most exciting thing to get into, but it sure is one of the most critical topics when it comes to protecting your loved ones and your property. Whether you are softening your hands and planning for the future or carrying on with the affairs of a loved one who passed away, having basic knowledge of wills, trusts, and probate gives you insight into how you could direct your decision-making and perhaps even avoid some costly blunders.
Here is an easier guide to what estate law has to cover, and why that will matter to you.
The Meaning of Estate Law?
Estate law deals with the handling of a person’s property, money, or any other assets while living and the distribution after death. It makes sure that a person’s wishes are honored, their debts are paid, and their beneficiaries receive whatever is due to them.
More typically, estate law itself is broken into the following:
- Wills and trusts
- Power of attorney
- Advance healthcare directives
- Probate administration
- Estate taxes
It can also handle guardianship for minor children or other dependents.
Wills: Putting Your Wishes in Writing
A will is a legal document that explains how your assets should be distributed after your death. It can name your beneficiaries, appoint an executor to administer your estate, and name guardians for any minor children.
Without a valid will, state laws dictate how your estate is divided, which might not coincide with your wishes. This process is known as dying intestate and can create delays, disputes, and unnecessary costs.
Trusts: More Control and Privacy
A trust is a legal arrangement whereby one party holds and manages assets for the benefit of another party. Trusts can help avoid probate, reduce estate taxes, and manage when and how assets are distributed.
Common types include;
- Revocable living trusts (revocable during your lifetime)
- Irrevocable trusts (as a rule, used for tax planning)
- Special needs trusts (for dependent persons who suffer disabilities)
Trusts are particularly useful for larger estates or estates with complex family matters.
A Primer on Probate
Probate is a court-monitored procedure that authenticates a will, pays debts, and distributes assets. While standard, probate can be a long and public process. A living trust (or on certain assets such as life insurance or retirement accounts) will keep an estate out of probate.
This article was written by Alla Tenina. Alla is a top San Fernando Valley bankruptcy lawyer, and the founder of Tenina Law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.