Welcome To Probate Help 101
What is probate?
Probate is a legal process that takes place after someone dies. It includes:
- proving in court that a deceased person’s will is valid (usually a routine matter)
- identifying and inventorying the deceased person’s property
- having the property appraised
- paying debts and taxes, and
- distributing the remaining property as the will (or state law, if there’s no will) directs.
Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person’s property.
What is a Will?
A will is a document used to provide for the orderly disposition of assets after death. Wills do not avoid probate. In fact, wills have no legal authority until the will maker dies and the original will is delivered to the probate court. Everyone with minor children needs a will to nominate a guardian or new “parent” in the event a child becomes orphaned. A backup will or “Pour-Over Will” is generally included as part of a living trust.
What is the difference between a Will and a Living Trust?
Like previously mentioned, a will does not avoid probate. The biggest distinction between a will and living trust is that a will is not “funded” with assets during the creator’s lifetime. Therefore, the court must step in and oversee the responsibility of transferring assets to the will maker’s estate upon incapacity or death. However, a living trust is funded during the trust maker’s lifetime, that is, the transfer of assets has happened in advancement of a trust maker’s incapacity and death, and allows the trust maker’s estate to avoid unnecessary court costs.
Should I plan to avoid probate?
Probate rarely benefits your beneficiaries, and it always costs them money and time. Probate makes sense only if your estate will have complicated problems, such as many debts that can’t easily be paid from the property you leave.
Whether to spend your time and effort planning to avoid probate depends on a number of factors, most notably your age, your health, and your wealth. If you’re young and in good health, adopting a complex probate-avoidance plan now may mean you’ll have to re-do it as your life situation changes. And if you have very little property, you might not want to spend your time planning to avoid probate because your property may qualify for your state’s simplified probate procedure.
But if you’re in your 50s or older, in ill health, or own a significant amount of property, you’ll probably want to do some planning to avoid probate.
How does the probate process work?
Probate usually works like this: After your death, the person you named in your will as executor — or, if you die without a will, the person appointed by a judge — files papers in the local probate court. The executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you’ve left. Then, relatives and creditors are officially notified of your death.
Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and onthe amount ofyour debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.
In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings lumber on. Then, eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
What is a Living Trust?
A living trust is a revocable and amendable legal agreement with three parties involved; the trust maker(s), the trustee(s) (or trust managers) and the trust beneficiary(ies). Typically, a husband and wife may name themselves to be all three parties at once, the trust makers who have the authority to manage all assets moved to the trust and retain the right to enjoy and have full use of these assets as beneficiaries. Back-up managers (successor trustees) are named in the event of a trust maker’s incapacity or death. Special provisions in the trust can control the management and distribution of trust assets when the time comes. And “death taxes” can be avoided or eliminated concerning the estate. A living trust can accomplish all these things without having to involve the expense, time and emotional stress that can come from having to go to probate court.
What is a Living Will?
A Living will is a health directive which allows you to state your wishes in advance regarding the types of medical life support measure you would like to have and those you would like to have withheld or withdrawn if you are in a terminal condition without reasonable hope of recovery and cannot express your wishes yourself.