When someone dies without a Living Trust that identifies how his/her estate is to be distributed, the estate goes into Probate. Probate is a court-supervised process that begins with naming an Executor to manage the process. The Executor:
- Manages the deceased person’s estate; depending on its complexity, this will take at least several months to a year or longer.
- Identifies the extent of debt and pays creditors.
- Manages assets, including determining whether or not to sell assets, which may include real estate, securities, or other property. If there are outstanding debts, but most of the estate is tied up in real estate, high-value artwork or other collections, they likely will have to be appraised and sold to produce cash to pay creditors.
- Once all debts have been satisfied and the Estate is in a condition to be closed, a petition is prepared and filed to distribute the estate among the deceased person’s heirs.
A note: Probate could have been easily avoided if the deceased had created a Living Trust
Probate rarely benefits your beneficiaries, and it always costs them money and time. It can be a difficult burden at a time when they are already dealing with loss and grief. Probate also means that your estate becomes a matter of public record. Probate can be easily avoided by creating—and updating–a Living Trust that outlines precisely how your estate will be distributed among your loved ones.