Estates And Trusts

Answer 1

Estates and trusts are closely related in probate law. In consideration of common law, an estate includes any material or tangible assets and property owned by the deceased person. The estate also includes anything that the deceased may have been entitled to inherit or gain in other ways, such as a monetary compensation from an open lawsuit. After the death of a person, their last will is opened, assuming a will was created. Wills designate the person chosen to handle the matters of the estate, taxes, debts and other issues. This person is called the executor; the person creating the will is called the testator. A person who does not create a will is said to be intestate and the matters relating to the estate must be determined by the court. Probate proceedings involving an estate normally last several years. Estate taxes must be filed for at least two years after the death and other obligations must be met to creditors.

Since the process of probate is time-consuming and often results in money and property being depleted or greatly reduced, people may instead decide to create a trust. Trusts can be constructed in addition to a last will and testament. A trust is a pre-arranged account set up to allow any real estate or monetary assets to be placed in it. With the protection of being placed in a trust, assets and property do not fall subject to claims made in probate proceedings. Courts are unable to seize either of these items, which are designated to specific people or one person. There are also special trusts to protect beneficiaries who are disabled or mentally handicapped, keeping them from losing their government benefits they also rely upon. Most trusts are subject to taxes while they are active, but for large estates, they are often preferred since they do not result in such a high amount of the estate diminishing. In many estate proceedings, the estate results in a 50% reduction from taxes alone. There are several different variations of trusts; to understand their full benefits and disadvantages, it is best to speak with an attorney who specializes in creating trusts. The law is very solid surrounding trusts and allows little room for outside interference. Families who will need the assets immediately after the decedent’s death to survive are good candidates for trusts also, even if the estate is not excessively large.