If you have a question about estate planning or probate, please call me at (763) 450-9494 or fill out the contact form if you would like to talk about your situation. I typically will respond by e-mail, but please provide your telephone number if you'd like me to call, and let me know when would be a good time to call.
Also, check out my blog for articles on estate planning. Here is the link:
Do I need a Will or estate plan? What is the difference?
I am often asked to explain the difference between a Will and an estate plan. The short answer is that a Will determines what happens to your property after you die, and can be an important part of an estate plan. An estate plan, by contrast, includes a Will, and also a healthcare advance directive and a power of attorney, and may include a trust as well. The healthcare advance directive and power of attorney both give somebody else the authority to make health care or financial decisions for you in the event that you are incapacitated.
I generally recommend that all persons have a Will, a healthcare advance directive (sometimes called a "living will"), and a power of attorney. A trust is sometimes appropriate as well, and a trust can be an important part of estate planning. If you own a small business, you may need to consider business succession planning issues as well, to pass the business onto the next generation.
A Will is a very powerful document that allows you to name a personal representative, a guardian for your children, and indicate what you would like to have happen with your property after you die. In addition to planning for what happens to your property after your death, I think that it is also important to appoint someone through a power of attorney and healthcare advance directive to make health care – related decisions for you and manage your financial affairs in the event that you become incapacitated.
What is probate?
Probate is the legal process for a personal representative to carry out the decedent's wishes as expressed in the decedent's Will. Basically, through the probate process, the personal representative is getting a judge to order how the assets of the estate – the property that the decedent leaves behind – is distributed.
Assets can be either probate or nonprobate in nature. Probate assets require a judge to order that ownership of the property be transferred from the decedent to someone else. Nonprobate assets are automatically transferred from the decedent to someone else when the decedent dies.
That is a fairly technical definition, and an example or two will be worth 1000 words. A probate asset would be something that is titled exclusively in the decedent's name, and does not have a beneficiary designation or another method of transferring ownership when the decedent dies.
For example, if the decedent owns a car outright, and no one else is listed on the title, that would be an example of a probate asset – you will need a judge to order that ownership of the motor vehicle be transferred from the decedent to someone else. Another example of a probate asset might be if a decedent owned real estate and was the only person on the title – and a TODD or another method of automatically transferring the title had not been recorded. Still another example of a probate asset might be life insurance or an IRA without a beneficiary designation.
Still, there are other methods besides starting a probate to transfer ownership of an asset from the decedent to someone else. Your best bet is to consult with an attorney about your options for transferring ownership.
Estate planning is what you do now, while you are still alive, to avoid or at least minimize the necessity of probate to transfer ownership of your property. An attorney can help you with your estate planning, and make sure that what you want to happen with your property actually happens.