If your loved one passes away with a will, their estate will go through the probate process which ensures their assets are distributed to their beneficiaries and their debts are paid.
The first step in the probate process is to file a petition with the court. If your loved one named an executor in the will, the executor can usually start this process. Otherwise, another interested party can file the petition. Once the petition is filed, all creditors must be notified so that they can make a claim against the estate, if applicable.
The executor must create an inventory of the deceased person’s assets and must pay any outstanding debts and taxes for the estate. Once these are paid, any remaining assets can be distributed to the beneficiaries named in the will.
Next, the executor must create a final accounting for the court. It’s important that this accurately reflects all payments made from the estate.
When making an estate plan, some people want to avoid the probate process because it can be lengthy, and sometimes expensive. The estate information may also become public. Some people choose to put most of their assets in a trust, where property is managed by a trustee for the benefit of named beneficiaries.
The assets can pass to the beneficiaries without court involvement in many situations. The person creating the trust has control over how their assets are transferred to the beneficiaries.
A trust also offers flexibility, because it can be tailored directly to the trust creator’s specific needs.