What is a will and what is probate? What happens to your assets after your death? It depends on what, if any, legal documents you have in place to direct the distribution of those assets. Generally speaking, assets can pass to beneficiaries through a few methods including intestate succession, beneficiary designations, a will, and/or a trust. Each method has its own benefits, costs, and quirks to consider when creating your estate plan.
A will is a legal document that allows you to specify who (or what) receives your assets when you pass away. It also allows you to name the person you want to be responsible for managing the distribution of those assets, your personal representative (sometimes called an executor), who could be a trusted relative or friend or a professional fiduciary. A will is a very old legal tool, and, as such, generally requires compliance with numerous formalities for valid execution.
With just a will in place, probate, a court process like a lawsuit, is generally necessary to distribute your assets after you pass away. To start the process, the will is proven in probate court. The court will formally appoint the personal representative to manage your assets during the probate process. Notices to creditors must be published, assets are inventoried, and all debts including taxes must be paid. Once the court approves the accounting and payment of all debts and expenses, the remaining assets may be distributed to the beneficiaries named in the will. Probate can be a lengthy and expensive process. Fortunately, there are other legal tools that may substitute for a will and allow for your assets to pass outside of probate entirely—utilizing such tools and dovetailing their unique characteristics together seamlessly undergirds the comprehensive estate plans we develop for our clients.
We’re reviewing other methods of passing assets in past and future news posts, and the Oregon State Bar provides additional resources on estate planning. But if you’re wondering how all of this affects your personal situation and would like custom-tailored professional advice, please contact us now to begin exploring your estate plan options.