'Decedents' is a term used in legal documents to reference persons who have died. It is most commonly used in last wills, revocable trusts and irrevocable life insurance trusts. Wills and trusts are used to bequeath inheritance assets to beneficiaries.
Decedents can give their personal belongings, financial assets and real estate holdings to whomever they wish. Most individuals gift assets to their spouse, children or direct lineage relatives such as sisters, brothers, mother, father, nieces and nephews.
When decedents die intestate (without a Will) or without a trust, all assets are held in probate court to determine rightful heirs. The probate process generally takes three to six months to complete, but can drag on for years if heirs contest the Will. Much depends on the estate value, amount of outstanding debts, and how well family members get along.
Establishing a trust is the only ironclad way to avoid probate. However, decedents with estates valued under $50,000 can engage in techniques to keep assets out of probate. Individuals who hold checking and savings accounts can designate payable on death (POD) beneficiaries. All that is required is to fill out a form through the banking institution where accounts are held.
Individuals who hold financial investments such as individual retirement accounts, 401k, or investment portfolios can designate transfer on death (TOD) beneficiaries. TOD beneficiaries can be designated at the time accounts are established. Beneficiaries can be added or deleted at any time prior to death.
Establishing a last will and testament does not keep assets out of probate, but can expedite the process as long as no one contests the Will. A statement must be included in the Will if decedents elect to disinherit direct lineage heirs.
Part of the probate process involves locating missing heirs. If a 'disinherited' statement is not included in the Will, the heir can claim the decedent believed they were dead or had no way of contacting them.
Contested wills delay the probate process and can potentially bankrupt the estate. Although heirs who contest wills are initially responsible for legal fees, the decedent's estate can potentially be held responsible for reimbursement of fees if a judge rules in the heir's favor.
Engaging in estate planning can prevent heirs from contesting a Will. This act also ensures heirs receive inheritance assets according to decedents' final wishes. Estate planning is available through professional estate planners, probate attorneys, credit unions and some banking institutions.
Basic estate planning includes a last will, healthcare proxy and power of attorney. Individuals with minor children can establish guardianship through their will. When decedents establish a trust their estate is exempt from probate and inheritance assets are distributed to named beneficiaries within 45 to 60 days.
Multiple options exist for protecting inheritance assets. Our comprehensive article library provides information and resources about estate planning, establishing trusts, probate, inheritance taxes and more.
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Published on October 10, 2009 at 02:01 AM | Comments: 1