During probate, known creditors must be notified of the death and given a chance to file claims. If they miss the deadline to file, they're out of luck forever. At this stage in your life, your main estate planning goals are probably making sure that in the unlikely event of your early death, your property is distributed how you want it to be and, if you have young children, that they are cared for. A simple probate-avoidance living trust has no effect on either income or estate taxes. More complicated living trusts, however, can greatly reduce your federal estate tax bill if you expect your estate to owe estate tax at your death.
Professional guidance is needed to set up such trusts.
If you don't make a will or use some other legal method to transfer your property when you die, state law will determine what happens to your property. Your property will be distributed to your spouse and children or, if you have neither, to other relatives according to a statutory formula. If no relatives can be found to inherit your property, it will go into your state's coffers. Also, in the absence of a will, a court will determine who will care for your young children and their property if the other parent is unavailable or unfit. To be valid, a holographic will must be written, dated and signed in the handwriting of the person making the will.