The Difference Between Estate Planning and Probate
You might hear people use the terms estate planning and probate interchangeably, but that is not accurate. While they are both related, they represent different legal processes.
Estate planning and probate will likely be relevant to you in the future, if not now. This is especially the case if you own property, face serious medical decisions, or have a spouse or dependents. Understanding both legal terms can help you make informed decisions to protect your loved ones and assets in the future.
What Is Estate Planning?
Engaging in estate planning usually involves preparing a Will. More specifically, it means making arrangements for what happens to your estate after your death or if you should become incapacitated.
Estate planning is not just for the wealthy. You have an estate if you own a house, car, checking or savings account, retirement funds, or debt. With proper estate planning and the guidance of a qualified estate lawyer in your area, you determine what happens to your possessions, specifically who takes ownership or continues to manage them. Estate planning also includes
- Appointing a guardian for a minor child or adult with a cognitive or behavioral debilitation
- Providing instructions if you become incapacitated before death
- Making financial arrangements that reduce court costs, taxes, or legal fees
- Providing for life insurance or disability income payouts to loved ones
How Is Probate Different?
Many people use the term probate when discussing administering a trust or Will. The difference between estate planning and probate is primarily about timing. While the former focuses on making the decisions and drawing up the documents before death or incapacitation, the latter involves enforcing those decisions in court.
Property, money, and other things the deceased person (decedent) owned and now leaves to others are called probate assets. They can include
- Checking and savings accounts
- Brokerage accounts
- Interests in a limited liability company (LLC) or corporation
- Life insurance policy
- Personal property like jewelry, art, or furniture
- Real estate
- Vehicles
When you draw up a Will and leave clear instructions about your post-death wishes, the probate process can be relatively straightforward in most cases.
Implications of Estate Planning and Probate?
Actions you do or do not take during estate planning can influence what happens during probate. You might have had a lawyer suggest you do all you can during estate planning to avoid probate court. For example, if you do not have a legitimate Will, a probate judge will have to determine how to distribute your assets after your death.
It is essential to plan for the future while you can, even if the process appears daunting or distressing. That is why hiring an estate attorney can put your mind at ease. Your lawyer can help you determine which of your assets are probate vs. non-probate. They can also recommend how best to transfer your property as you see fit.
An experienced estate attorney can give you confidence when planning for your future and protecting your loved ones. A lawyer at Donnellon, Donnellon & Miller will work hard to understand your situation and answer all your questions. For an initial consultation, call 513.891.7087 today to speak to someone from their legal team.