Do You Have Peace?
When thinking about your legacy, there are two components that directly impact you, your family, and those individuals and entities you care most about; specifically, your plans (if any) for the distribution of your assets, commonly referred to as estate planning, and the legal means of effectuating the distribution of your assets, commonly referred to as estate administration. Essentially, estate planning entails documenting and describing, in written form, your desire regarding how your assets are to be distributed on certain conditions, most commonly and significantly, after death. On the other hand, estate administration is the process that your loved ones, who survive you, will undergo to arrange for the distribution of your assets, whether that is accomplished through your estate plan or pursuant to state law if you have made no plans.
As previously stated, estate planning is the idea of documenting, in writing, a mechanism for asset distribution most commonly after one’s death. The two most frequently used tools to effectuate an estate plan are the formation and execution of a trust and/or the execution of a last will and testament. Both means of estate planning contain benefits and potential detriments. For example, the formation and execution of a trust, and the immediate steps necessary to perfect estate planning via a trust require more up-front work and expense but is an excellent estate planning tool to defend against future changes in family and marital dynamics and desires. In addition, estate planning via a trust is more efficient, both in cost and time, at the time of post-death asset distribution. In contrast, the execution of a last will and testament is less costly up front and requires less pre-death planning requirements; however, one must cautiously consider the fact that state law provides a mechanism, through a process called year’s support, for a surviving spouse to, in some cases, completely change the deceased spouse’s estate plan and set aside the provisions of a last will and testament. Another hidden aspect and cost of using a last will and testament is that the law requires probate (i.e., proving) of that will in court.
With that in mind, estate administration is the process of determining and distributing a deceased loved one’s assets according to the decedent’s estate plan, either through a last will and testament, a trust, or by state law. Typically, estate administration occurs pursuant to state law when there is no estate plan in place or when an heir at law or another interested party desires to set aside a decedent’s estate plan. Having no estate plan in place means assets get distributed to the heirs at law, or as mentioned above, in the case of a surviving spouse filing a successful year’s support petition, entirely, or a portion thereof, to the surviving spouse. Any mechanism which does not involve a trust will necessitate the filing of a petition in the probate court in the county of the decedent to properly and legally effectuate asset distribution, which may take an indefinite amount of time. However, all asset distributions effectuated via a trust will avoid the probate process altogether.
Please reach out to us so that we can discuss these options and considerations with you so that you and your family can have peace of mind.
Phillipians 4:6-7 “Don’t worry about anything, but in everything, through prayer and petition with thanksgiving, present your requests to God. And the peace of God, which surpasses all understanding, will guard your hearts and minds in Christ Jesus.” (CSB) Scripture quotations marked CSB have been taken from the Christian Standard Bible®, Copyright ©2017 by Holman Bible Publishers. Used by permission. Christian Standard Bible® and CSB® are federally registered trademarks of Holman Bible Publishers.
Chad Knott, Owner