California Estate Planning and Probate Basics
Dec. 29, 2016
When people die, their property is transferred to their heirs and beneficiaries in a process called probate. Probate can be contested by heirs who disagree with the nature of their inheritances or believe that wills were created improperly, but most estates are uncontested. During probate, the decedent's assets are gathered and used to pay all of the debts and taxes that their estate owes. Then the estate clears up any disputes before distributing the assets that remain to the appropriate beneficiaries.
Probate proceedings include a number of costs that can bite into estate assets, such as attorney fees and court expenses. Estate holdings may also be used to pay fees for the executor. Testators commonly designate individuals in their wills to act as executors, but courts can name personal representatives to do so in the event that no executor is specified or if there is no will.
People can use wills to specify how their assets should be distributed. In the absence of a valid will, however, assets will be distributed according to the state's law of intestacy. This could result in the receipt of assets by people who the decedent did not want to get them, however, which is why having a will can be important.
In order to avoid the delay, expense and publicity that can often accompany the probate process, some people choose to create trusts for the distribution of assets after they die. In addition to sidestepping probate, assets contained in a trust can be distributed more quickly than will bequests. They can also be used for other reasons, such as to control the timing of distributions to an heir who the settlor is concerned would squander a lump sum inheritance.