What exactly is estate planning?
Estate planning is the process of deciding who will get your property and how you would like it transferred after your death. It can also involve designating a guardian for young children or a representative to make financial and medical decisions for you if you become incapacitated.
Why would I want to avoid probate?
Probate is an official court proceeding in which the estate of the decedent is divided according to a will (if one exists) or state succession laws (if no will exists). It is also a lengthy process (it usually takes 9-14 months) and involves a lot of paperwork, time, and money. In addition, the documents filed in a probate proceeding are a matter of public record, and some may wish to avoid public scrutiny of their financial situation.
What's the difference between a will and a living trust?
A will is a legal document that becomes effective upon your death and details how you want your property distributed. All property left in a will must go through probate court. A living trust, on the other hand, is in effect while you're still living; you transfer the property into the trust, yet you still have control of the trust and can make changes or additions. Property distributed via living trust is generally not subject to probate.
What are some other options besides wills and trusts?
There are several alternatives to wills, and many people choose to have a combination of estate planning devices, such as a living trust, a "Payable on Delivery" (POD) bank account, in which the funds automatically transfer to another in the case of death, or a "back-up" will.
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