Simply put, an estate refers to the collective assets a person owns. After death, a person's estate is distributed to their heirs according to dictates of a will or trust. If there's no will or trust, the estate passes according to the laws of the state. If the estate is distributed by a will or by the laws of the state, a court process known as probate is required. There are good reasons to avoid probate.
Probate is a matter of public record.
And the process can last for months, or sometimes years, and incur added expense. Following the emotionally draining and stressful loss of a loved one, avoiding such a harrowing experience is gratefully appreciated by remaining relatives. Estate planning, on the other hand, prepares for the orderly handling, disposition, and administration of an estate when the owner dies. Estate planning includes drawing up a will, establishing trusts, and taking action to minimize estate taxes, perhaps by passing property to heirs prior to death or by setting up certain types of trusts. While most people are familiar with a will, many don't realize its limitations - no matter how carefully it's constructed.