The Differences Between Wills, Trusts, and Intestacy

When a person dies, questions inevitably arise about dealing with the property that the person has left behind. What happens to that person’s property depends primarily on whether he or she had a valid will or trust or not. Different rules apply when a person has a will or trust in place at the time of death and when a person dies without a will or trust in place, or intestacy. Here’s what you need to know about the differences between wills, trusts, and intestate succession.

  1. Some property falls outside of wills, trusts, and intestacy rules altogether. Property with named beneficiaries passes to the named beneficiaries without regard to wills, trusts, or intestate succession. For example, life insurance policies and retirement plans usually have beneficiaries whose policyholder chooses to receive the funds after their death. Likewise, property with two joint owners with the right of survivorship automatically goes to the surviving joint owner. So, wills, trusts, and intestate succession rules apply only to property that doesn’t have a listed beneficiary.
  2. Wills are legal documents in which a person decides how to distribute his or her property after death. These documents must meet specific legal requirements to be valid. A will typically lists who inherits the property belonging to a person after his or her death. The people who inherit property according to a will are called heirs.
  1. If a person dies with a will, their heirs usually must go to probate court to settle the estate, which is the property that the deceased person has left behind. In a probate case, the executor (the person named in the will to manage the estate) must collect the property, determine its value, pay any debts, and distribute the property to the heirs as listed in the will.
  1. In some cases, going to probate court is unnecessary, even if a person died with a will. If all the property passes to a joint owner or a named beneficiary, as described above, then going to probate court is unnecessary. Likewise, if the entire property in an estate is worth $166,250 or less, then you might be able to use a simplified process to avoid probate court and still transfer the property. However, if the estate contains real estate, then you cannot use this simplified process, even if the entire property in the estate is worth $166,250 or less.
  1. A person who is unhappy with the provisions of the will or thinks the will is legally invalid can go to probate court to contest or challenge the will. For example, if a mother disinherits one of her children in her will and leaves the child no property, then the child might challenge the will in court. Likewise, if an heir believes that the deceased person was not legally competent to sign the will due to dementia, then the heir might challenge the will in court.
  1. A trust is one person holds the legal title to property for the benefit of another. The person holding the title to the property is called the trustee. The person who benefits from the trust is the beneficiary. The person who creates the trust and puts property in it is called the settlor or the trustor. Different people or the same people can fill these three roles.
  1. A trust is one way to avoid probate court. Unless someone disputes the provisions in the trust or a conflict arises due to problems in interpreting the trust, the probate court does not generally become involved with a trust. However, the court can become involved if a beneficiary or other interested person asks for assistance.
  1. A trustee carries out the terms of the trust both during the settlor’s lifetime and after a settlor dies. These duties include protecting property, valuing it, and distributing it to the beneficiaries according to the trust provisions upon the settlor’s death.
  1. Intestate succession is the order in which surviving relatives of a deceased person inherit property when there is no will or trust. Intestacy rules also do not apply to property with a listed beneficiary. This situation most often arises when a person dies without a will but also can arise when a person has a will, but it is legally invalid for some reason.
  1. When there is no will, different factors impact which surviving relatives are entitled to the deceased person’s property. For instance, if a person is married at the time of her death, her community property would go to her spouse. However, if she had separate property and a spouse and one child survive her, her spouse would receive one-half of the separate property, and her child would receive the other half of the separate property. Alternatively, if she had two or more children, her spouse would receive one-third of the separate property, and the children would receive the remaining two-thirds of the property.

LBE Law Firm offers individualized representation for individuals concerning wills, trusts, and estate law matters. Our office also handles general legal matters, including immigration law, bankruptcy, family law, and contracts. You can reach us at 1-424-LBE-LAW4 (1-424-523-5294) (call, text, or WhatsApp) or via email at Contact us today to learn how we can help you with your legal matter.

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