Explaining the meaning of certain legal terminology involving the transferring of properties after
someone’s death.
Disclaimer:
At Kentucky Lifestyle Properties we do not claim to be real estate attorneys. But we are involved in many real estate transactions. This is a brief overview of some of the wordage that can be confusing for some people.
Please consult an attorney who is well versed in real estate law when planning the distribution of your property and assets.
Real estate terminology can be difficult for many to understand who are not directly associated with the real estate industry on a day-to-day basis.
When someone dies, what happens to their property and assets?
Who gets what depends on if there were any prior arrangements or documentation filed by the owner or owners to ensure a smooth transition of ownership to the surviving family members.
This could be a very trying and confusing time if steps were not taken to ensure a smooth transition of ownership.
What happens if someone dies without a recorded
Will or anything stating who will inherit their assets?
When this happens, the court will take over through a process called
probate.
The court will oversee the process of the distribution of assets to the deceased person’s heirs or beneficiaries. If a person dies
without a will or the will is unclear, probate ensures the assets are handled and distributed according to state laws.
But here is where some of the terminology can be confusing for most people.
Administrator vs Executor
An administrator and an executor both manage the estate of a deceased person, but they are appointed differently. An executor is named in the will and is responsible for carrying out the testators wishes. An administrator is appointed by the probate court when someone dies without a will (intestate) or if named executor is unable or unwilling to serve.
What does
testate mean? This is where a person died leaving a valid will.
What does
intestate mean? This means the person died without a will. A testate estate is distributed according to the will’s instructions, while an intestate estate is distributed according to state laws of intestacy.
There are other ways to ensure a smooth transition of property ownership through the creation of a
Trust.
There are two main types of trusts that are commonly used.
Revocable and
Irrevocable.
You can choose to create a
revocable living trust, which can change or revoke at any time, or an irrevocable trust which is more permanent.
Here in Kentucky, a living trust is a legal document that allows you to manage your assets during your lifetime and distribute them to beneficiaries after your death, all while passing the probate process. You create a trust while you are alive, and the assets you in it are managed by a
trustee who can be you or someone else according to the terms of the trust.
A
Successor Trustee is someone you will name to take over managing the trust and distributing assets after your death.
Creation of the trust: You as the settler, create the trust and place your assets like real estate, bank accounts or investments into it.
Many people are under the impression that a last will and testament is still all that is needed when it comes to estate planning. Unfortunately, however, a will by itself sometimes isn’t enough. Instead, most people require a plan that consists of several estate planning documents.
As stated earlier, it is always advisable to contact an Attorney when creating a will or a trust.
