Estate comes with a lot of questions. While we can’t answer all of them on a single webpage, this article does address some of the biggest question marks that might be hovering over your own decision about whether to file as an individual (and how to do so).

Remember: every situation is different. Because of the uniqueness of your circumstances there is really no substitute for directly speaking with an experienced lawyer.

What is a "Living Will"?

The terms "living will," "health care directive," and "advance directive" all refer to the legal document that lets people state their wishes for end-of-life medical care.

A living will, despite its name, isn't at all like the wills that people use to leave property at their death. A living will, also called a directive to physicians or advance directive, is a document that lets people state their wishes for end-of-life medical care, in case they become unable to communicate their decisions. It has no power after death.

If you're helping someone with their estate planning (or doing your own), don't overlook a living will. It can give invaluable guidance to family members and healthcare professionals if a person can't express his or her wishes. Without a document expressing those wishes, family members and doctors are left to guess what a seriously ill person would prefer in terms of treatment. They may end up in painful disputes, which occasionally make it all the way to a courtroom.

Why You Need a Will

Many people wonder if they really need a will. They may think that they don't have enough assets to bother with a will. Some people erroneously believe that a will causes your heirs to have to go through probate, leading to unnecessary expenses. However, a will is a good idea for just about everyone. Read on for some of the reasons to have a will.

A will is a document in which a person declares what she wants done with her property at the time of her death. A will has no effect until the person who wrote it, known as the testator, dies. The testator can also revoke a will at any time prior to her death.

If you die without a will, the state will distribute your property to your heirs according to the state's intestacy statutes. The statutes might call for a distribution that is similar to what you want. Then again, maybe they won't.

State intestacy laws will provide how the sum total of your property is to be divided among your heirs. It can't provide for who will get certain specific items of your property. This can lead to many problems. Your heirs may not agree on who will get certain items of your personal property. For example, say you have inherited your grandmother's wedding ring and intend to pass it on to your daughter. If you die without a will saying that is what you want, your son may feel very strongly that his wife should have it. So even if you don't have a lot of assets, you may be concerned about making sure that certain items of your property go to the people that you want it to. You can do this with a will.

What Is A Living Trust?

The most common kind of living trust, the simple revocable living trust, is essentially a substitute for a will—people create it while they're alive, to leave property at their death. The main reason to use a living trust instead of a will is probate avoidance. Unlike property left through a will, property left through a trust doesn't need to go through probate before it can be transferred to the people who inherit it. So using a trust saves surviving family members the money, time, and effort that would otherwise be spent on probate.

A living trust has other advantages as well. It's private (unlike a will, which becomes a matter of public record when it's filed with the local court after death), and it can take effect during life if the person who made it becomes incapacitated and needs help managing trust property.

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Will Probate Be Necessary?

Not all estates need to go through probate. To determine whether or not you'll have to conduct a probate court proceeding for the estate you're administering, you need to look at two factors:

  • the kind of assets in the estate
  • the total monetary value of estate property

One factor that does NOT matter: whether or not there is a will. An estate may need to go through regular probate even if the deceased person left a valid will.

Kinds of Assets

Many common assets don't go through probate. A few examples include:

  • real estate, bank accounts, or other assets owned in joint tenancy, community property with right of survivorship, or tenancy by the entirety
  • property held in a living trust
  • retirement accounts for which a beneficiary was named
  • life insurance for which a beneficiary has been named
  • payable-on-death bank accounts
  • vehicles or securities registered in TOD (transfer on death) form

If the estate consists entirely of assets like these—which is not uncommon, especially if the deceased person had been married a long time and owned most things with his or her spouse—probate won't be necessary.

Handling Bank Account Funds in an Estate

Solely Owned Bank Accounts

If the deceased person owned the account in his or her own name, and did not designate a payable-on-death beneficiary, then the account will probably have to go through probate. If the total value of probate assets is small enough to qualify as a "small estate" under state law, however, the inheritors will be able to use either simplified probate procedures or an affidavit to claim the money. Meanwhile, safeguard the money by transferring it to the estate bank account that you'll open.

Accounts With a Payable-on-Death Beneficiary

These are the easy ones. The money is not part of the deceased person's probate estate, so you, as executor, don't have any authority over it.

The beneficiary named by the deceased person can simply claim the money by going to the bank with a death certificate and identification. The bank should have the document in which the account owner designated the POD beneficiary.

Jointly Owned Accounts

If the deceased person owned an account jointly with someone else, in most cases the surviving co-owner is automatically the account's owner. The account does not need to go through probate to be transferred to the survivor.

Transferring Real Estate After Death

When a family member dies, there's certainly a lot to sort out. If the estate you're dealing with contains real estate, such as a house, it's probably the most valuable single asset in the estate—and surviving family members are going to be extremely interested in what happens to it. (If more than one person inherits it, there are many opportunities for conflict.) Let's look at the process for transferring the property to its new owners.

Taking Care of Real Estate

Before you transfer real estate, you need to take care of it. This includes paying the mortgage and taxes and keeping the place maintained until it can be formally transferred to its new owner or owners.

You may also need to get the property appraised, which means getting a professional valuation of what the property is worth. This might be required if the estate goes through probate, or to determine whether the estate qualifies for simplified probate procedures. Beneficiaries might also want to know what the real estate is worth, or may need the value for tax purposes.

Can individuals receiving disability benefits or payments get Medicare or Medicaid coverage?

Medicare helps pay hospital and doctor bills of disabled or retired people who have worked long enough under Social Security to be insured for Social Security benefits. It generally covers people who are 65 and over; people who have been determined to be disabled and have been receiving benefits for at least 24 months or have amyotrophic lateral sclerosis (ALS); and people who need long‑term dialysis treatment for chronic kidney disease or require a kidney transplant. In general, Medicare pays 80 percent of reasonable charges.

In most States, individuals who qualify for SSI disability payments also qualify for Medicaid. States may refer to the Medicaid program by different names. The program covers all of the approved charges of the Medicaid patient. Medicaid is financed by Federal and State matching funds, but eligibility rules may vary from State to State.

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