Many people often wonder about Estate Planning and Administration and why it is important. What most people don’t realize, is that this process is more than just a Will. Estate planning involves making a full assessment of your family situation, where you are now, where you want to be, and what to do if, unfortunately, you suffer a life-altering disability or even death.

At Salmon & Hewins, we prioritize ensuring our clients fully understand the intricacies of Estate planning and administration before proceeding. Our goal is to empower our clients with confidence as they plan for the future.

What is an Estate?

An Estate holds various meanings, particularly from a conceptual viewpoint. When an individual passes away, leaving behind assets and possibly debts, a quasi-legal entity, known as the Estate, is established. It encapsulates the process wherein debts are settled, and assets are distributed to designated legal heirs or beneficiaries named in the Will.

In cases where the person who has passed away did good Estate planning, they can avoid having to open an Estate in court.

The Formal Estate is a legal term which identifies a deceased person in a court of law when a case is opened in order to administer that person’s affairs with some level of court supervision. This would be a formal term such as “The Estate of [Deceased’s Name],” with the cause number assigned in the county the person passed away. Much like described above, the Estate is a manner in which a person’s affairs are wound up after their death. This process ensures supervised administration of the deceased’s affairs.

Testate vs Intestate

In an Estate there are two general categories that we may find. The first Estate is one in which the person who passed away has previously prepared a Last Will and Testament directing how debt should be paid and how remaining assets should be distributed. Commonly referred to as testate.

The other type would be called intestate in which the person who passed away had no Will. If such a person did not have a Will, then the debts would be paid according to the law and the assets would be distributed according to the law of intestate succession.

In most cases, when a person dies without a Will, their assets are divided evenly amongst their living family members, with those closest in relation receiving priority. For instance, if a single father with two minor children dies intestate, his Estate will be split equally between his surviving children after any debts have been settled.

What is Probate?

“Probate” specifically stands for the concept establishing that a person’s Will is valid. It’s typically done by submission of the original Will to the court, which triggers an obligation in others to object if they believe the will is invalid. In fact, those in possession of an original Will must “submit the Will to probate” upon a person’s death. This process has specific obligations in how this is done.

In reality, though, the term “probate” has a broader usage. For instance, one thing many people ask in estate planning is how to avoid probate, which in turn, gives you the option to make gifts while living (inter vivos transfers), and designate direct beneficiaries (retirement accounts, or Transfer on Death Deeds for real property, for instance) in order to avoid the process of opening an Estate in court.

Many people wish to do this because they perceive that opening an Estate is more expensive than simply planning ahead. In the majority of instances, that’s correct.

Key Takeaways

The key takeaway from this emphasizes the importance of proactive preparation. Estate planning and administration not only safeguards your assets but also ensures peace of mind for you and your family.

We trust this overview has provided valuable insights. At Salmon & Hewins, rest assured, you and your loved ones are in capable hands.