A lot of estate planning is about avoiding the probate process. Probate is a court process through which an estate is handled after an individual's death. Through probate, an executor can be appointed for the purpose of identifying heirs and beneficiaries, paying off estate debts, and distributing estate assets.
An executor will also handle many administrative duties such as cancelling credit cards and home services like cable and internet, and he or she will also notify the proper government agencies of the individual's death.
Truth be told, the probate process can be lengthy and costly. This often leaves heirs and beneficiaries waiting for their inheritances while the estate's value quickly dwindles due to court and executor costs. Probate can also lead to litigation when individuals contest the distribution of estate assets. Again, this can lead to significant delays and costs. Fortunately, with sound estate planning, many individuals can avoid having their estates pass through the probate process.
There are a number of ways to avoid probate. Perhaps the most popular way is to create a revocable living trust. This type of trust allows an individual to place assets in trust while retaining control over those assets. Then, when the trust's creator passes away, a successor trustee takes his or her place and ensures that the trust assets are distributed to named beneficiaries. This same process is followed when individuals are named as beneficiaries of certain accounts, like retirement accounts.
These are just a few of the numerous ways individuals can tailor their estate plans to avoid probate. By doing so, they can better ensure that their estate's assets are distributed in accordance with their wishes and the value of the estate isn't diminished by unnecessary delay.