If you have assets that you want to pass on to specific beneficiaries, estate planning is a critical step to take. One word that you may hear a lot when you start looking into estate planning is “probate,” but it is not always clear what that means. If you have specific questions about planning for your estate, it is always best to speak directly to a Pennsylvania estate planning attorney, however, we will provide general information here.
What is Probate?
After someone passes away, their estate is sent to probate court. Here, a personal representative assigned to the estate is responsible for identifying all assets and debts, and using the assets to pay estate taxes and any outstanding debts in order to settle the estate. The remaining assets will then be distributed to beneficiaries. In the event that the decedent had a will it must be located and submitted to the probate court in order for the court to determine whether the will is valid. A will is not valid if it does not meet certain criteria. The most common reason for a will to be found invalid is if it was not signed and dated by the testator in the presence of two witnesses. It may also be invalid if the copy submitted to the court is not the original, or if it is not the most recent version of the will. Additionally, the testator must have been at least 16 years of age when the will was created. For this reason, it is a good idea to have an experienced attorney aid in the preparation of your will, to ensure that it is not found to be invalid or unenforceable on a technicality that otherwise could have been avoided.
The will can also be challenged by interested parties if they believe that the will was created under undue influence. If the will is found invalid or unenforceable for any reason, or if there is no will located or there is not believed to be a will in existence, the probate court will apply intestate succession statutes in order to determine how the testator’s assets are distributed. Intestate succession statutes can vary based on the state, but generally give preference to the spouse and children of the decedent. If none exist, then the decedent’s parents or siblings may inherit. If you would prefer to have your assets otherwise distributed, it is important to create a valid will.
Will I Have to Go Through Probate?
Regardless of whether you have a will or not, your estate–or at least parts of it–are likely to land in probate court. Wills must also go to probate court because they must be determined valid before they can be relied on. However, estate planning can help you keep critical assets out of probate court and in the hands of your loved ones. The best means of accomplishing this are creating trusts and adding joint-ownership with a survivorship right to certain assets to which loved ones would need immediate access.
Revocable and Irrevocable Trusts
Trusts are another effective way to avoid probate. When you transfer property into a trust it ceases to be your property and instead becomes the property of the trust. This allows it to avoid probate. The type of trust that you choose determines how much access or control you will have over the trust. Irrevocable trusts are extremely restricted. Once you create them, you should not intend to have to make any changes. If you do wish to make a change to the irrevocable trust, you must gain the unanimous consent of all named beneficiaries. The beneficiaries are also more or less set in stone so it’s important to be very intentional about who you are naming. Irrevocable trusts do come with significant tax benefits though that make them a great option, especially for people with large estates. Revocable trusts, on the other hand, can be altered, changed, and even revoked, at any point during your life. Because of the significant flexibility and control that they offer to the testator, they do not offer the same tax benefits.
Contact the Estate Lawyers at NBMS Law
If you need an estate plan that meets your needs, or if you are fighting for your fair share of an estate, the experienced trust, estate, and probate attorneys at Pennsylvania’s NBMS Law are ready to help. Contact us today to schedule a consultation.