Probate is the legal process of settling an estate. This typically happens when someone dies and leaves a property, money, or other assets behind. The probate process can be complex, but its basic purpose is to ensure that the deceased person’s assets are distributed according to their wishes. To do this, the court appoints a personal representative to oversee the estate. The personal representative is responsible for inventorying the deceased person’s assets, paying debts or taxes, and distributing the remaining assets to the beneficiaries. The probate process can be time-consuming and expensive. However, it is often necessary to ensure that a person’s final wishes are carried out.
Creating a Living Trust or Will makes a challenging life event easier for your loved ones.
It’s essential to understand that your will must go through probate, but it’s much simpler when you have planned ahead. Read on to learn everything you need to know about probate.
What is Probate?
Probate is a legal proceeding that authenticates your will and approves your named Executor so they can distribute your property and belongings. All your assets must be known and assessed for total value during the probate process. Once that is done, debts and taxes are paid, and the estate’s remaining value is distributed.
This process becomes more complicated in cases where there’s no will. In that case, the courts handle proceedings and make all decisions for you because there is no documentation stating your final wishes.
Your estate will go through the probate process if you don’t plan properly. The process is greatly simplified or avoided when you have a solid estate plan. The more planning you do now, the easier it will be on your loved ones after you pass.
One way to lessen or avoid the burden and headache of probate is by creating a Trust. Any assets you place into your Trust will bypass probate.
What Has to go Through Probate Court?
If you don’t have a Will, everything you own will go through probate court. The following will always go through the probate process, regardless of what your Estate Planning states.
- Any inheritance where the Beneficiary predeceases the giver: If you leave an inheritance to someone and they pass away before you do, and you fail to update your will, the courts will be involved in deciding how to settle this part of your estate.
- Non-titled property: This includes things like jewelry, art, and family heirlooms. They will go through probate if these items are not titled in someone’s name. A non-titled property is anything you own that doesn’t have paperwork.
- Partner-owned investment property: This includes any property that is jointly owned with someone else titled “tenants in common.” A probate court will step in to help determine how your share is passed down if clear instructions aren’t present in the will.
- Sole ownership property is any property with only your name on the title. A probate court will be needed to help pass this type of property down according to your will. You can avoid this in your state by adding “TOD” (transfer on death) to the title or deed.
What Does Not Have to Go Through Probate Court
What is the Probate Process?
How the probate process plays out in court depends on whether or not you have a Will. When there’s no will, only the beginning of the probate process will differ. The most significant difference is that when no Will is present, the court appoints someone as a Personal Representative to oversee the allotment of your assets. Once a Personal Representative is appointed, the rest of the process will be the same.
Death Certificate
The first thing that needs to happen is filing the death certificate. Someone, usually your lawyer or Executor, will inform the court of your demise and submit a copy of the death certificate to start the probate process.
Have the Will Validated
The next thing that needs to happen is to have the will validated by the court. The court will review the will to ensure it was signed correctly and that there are no errors. If everything is in accordance with the law, the court will approve the will and move on to the next step.
Select Someone to Conduct Probate
The court will appoint someone, the Executor or Administrator, to oversee the process and settle your estate. The Executor is usually named in the will, but if there is no Will, the court will appoint a personal representative for the role.
Post a Bond
The Executor or personal representative will be required to post a bond, an insurance policy that protects the estate from any mismanagement on the Executor’s part.
Inform Beneficiaries & Creditors
This is likely the biggest task the Executor or Personal Representative will undertake. They will then have to notify all of the beneficiaries named in the will and any creditors to whom the estate owes money. This is typically done by sending a notice to everyone’s last known address.
Determine Value of Assets/Property
The Executor will also have to determine the value of all of the assets and property that are part of the estate. To determine the value of an estate, an assessment must first be completed to account for everything you own at the time of your passing. This includes real estate, personal property, vehicles, stocks, bonds, and other valuables.
Pay All Fees and Debts of the Deceased
After the Executor has determined the value of the assets, they must pay any debts and fees associated with the estate. This includes funeral costs, taxes, and any outstanding bills. However, this step needs careful attention because there is a tendency for debtors to go after Beneficiaries in the future to recoup any unpaid debts.
Distribute Remaining Assets
After all debts and fees have been paid, the Executor will distribute the remaining assets to the Beneficiaries. The Executor or Personal Representative will transfer titles and deeds into the correct Beneficiary’s name, as directed by the will or the court.
How to Avoid Probate
Avoiding probate can have several benefits, including time, cost, and privacy. Below are strategic ways you can minimize the stress and pressure of probate for your loved ones:
- Establish a Living Trust: A living trust is an arrangement in which you, as the grantor, transfer ownership of your assets to a trustee. The trustee then manages the assets for the benefit of your named beneficiaries.
- Give assets to loved ones while you’re still alive: Reducing an estate’s value can drastically simplify the probate process and potentially have positive tax advantages in terms of federal and estate taxes.
- Keep your estate small: The size of your estate will directly impact the probate process’s complexity. The larger the estate, the more time and money it will take to go through probate.
- Title accounts POD or TOD: “Payable on Death” (POD) or “Transfer on Death” (TOD) designations can be used for bank accounts and investment accounts. These designations allow you to name a beneficiary who will receive the account assets upon death.
- Title property jointly: One way to avoid probate is to title your property jointly with another person. When the property is titled jointly, the surviving owner will automatically receive ownership of the property upon your death.
If you have questions about probate or want to learn more about how to avoid it, the Saanichton Law Group can help. We specialize in estate planning and can advise you on the best way to protect your assets. Contact us today to schedule a consultation.
