Final answer:
A trust is an effective legal tool for transferring property to heirs without going through probate proceedings. It ensures a private and irrevocable transfer upon death, avoiding court intervention and saving on probate fees and taxes.
Step-by-step explanation:
A trust is a legal arrangement that allows for property to be transferred to heirs without going through probate. This estate planning tool acts like 'the family bank' and upon the death of the trust maker, the appointed executor and trustee(s) facilitate the transfer of the trust's assets according to the predefined terms. The process is private and the terms typically become irrevocable after death, ensuring that assets are distributed without court intervention. When a person dies intestate, meaning they have not created a will or trust, their estate will go through probate and assets will be divided according to state laws. These laws dictate the hierarchy of beneficiaries such as the spouse, children, parents, and siblings. Therefore, establishing a trust can prevent the state from controlling asset distribution and can also provide savings on probate fees and taxes.
In terms of historical context, even ancient codes such as those found in the flyer published by Prudential Insurance Company, addressed the transfer of property upon death - albeit with different legal ramifications. Similarly, without modern estate planning tools such as trusts, the fate of the property would revert to legal defaults which may not align with the deceased's wishes.