Plan Ahead | Elder Law Estate
The Basics of a Probate Estate
What is probate of estate? First, it can be helpful to first understand the meaning of probate. Probate means the official proving of a will. Hence probate estate is all the money, property, and assets owned by the deceased person that might have to be proven to the court that the will is factual. The will may give ownership of items to a specific beneficiary or no designated beneficiary.
Are All Estates Required to go Through Probate?
Probate may not be required if the estate (property, asset, amount of money) is minimal. The probate process may not be necessary for every estate. The main reason probate can be necessary is if there is no other way to transfer an asset to the ones involved with the estate. In the case of a joint asset or an asset that belongs to more than one person. If both parties agree to give ownership to the person who outlives the other, there is no need for the probate court process.
To avoid probate, ensure your various accounts, including IRA, 401 K, etc., have a beneficiary stated. Depending on where someone lives, they might have access to several opportunities. For example, some banks may allow you to designate a beneficiary to your bank accounts. In addition, designating beneficiaries to the real estate a person owns is permitted in some states.
What Happens During Probate?
The first step of the process is ensuring the last will and testament is authentic. After someone passes, it is essential for the person with ownership of their will to file it with a probate court. After the last will and testament is filed, an application to open the probate case is filled out. Next, judges in court hearings will determine whether the last will and testament is valid. Anyone involved can object or bring in any additional information during the hearing. Usually, if a will is signed and a witness can confirm the deceased signed it, then the court will agree.
Next, a personal representative or executor is appointed. This representative is most often chosen by the person who has passed away and is included in their will. The appointed person is required to settle the estate and follow the probate process.
Sometimes, the personal representative must post a bond before accepting the letters and acting for the estate. Bonds are a way to ensure any financial damages that happen to the estate because the executor will be insured.
Locating Assets and Distributing Them
Locating the assets of the one who passed away is the next important step. The executor or personal representative is in charge of locating and taking possession of each asset owned by the deceased. They will keep track of and take care of the assets while going through the probate process. Sometimes, all assets aren’t tracked or may be forgotten about in the will. It is important to find these assets and record them. The executor needs to upkeep the house or building by paying taxes, updating insurance, and making mortgage payments if applicable. While taking care of assets, they will form a written report about each. The list will include everything owned, how much it is valued, and how the value was calculated.
Creditors become part of the process next and should be notified of the death. Most newspapers will require that the executor posts a death notice. Usually, there is a specific amount of time the creditor has to make claims for money they may be owed. These claims must be accurate and proven. Any other debts they may have had must be taken care of as well. Other assets may be used to pay any debts, including any debt created in the last stage of life.
Final income tax returns must be filed, including any estate taxes. Assets may be liquidated to gain the money necessary. The final stage is to distribute each part of the estate that is left. Beneficiaries in the will should obtain their fair share of the assets left over.
Determining Whether a Will is Testate or Intestate
Having a testate will is highly beneficial not only for the deceased owner of the will but also for the beneficiaries. Testate wills are valid, which means all intentions are clearly written out and legally correct in the final last will and testament. Even if the person has a last will and testament written out, it doesn’t mean it’s automatically testate. Before finalizing a will, take the time to go over it in detail. After passing, there is no way to change what the person has written or the plans that they had in mind. Making sure a will can hold up in court is extremely beneficial.
Wills that are not complete or valid is said to be intestate, and when the last will and testament only clearly express some assets, this is called partially intestate. If a will is configured as intestate, then the legal system will decide how to divide the estate. The legal system will basically create a last will and testament for the deceased and use past cases that relate to the person themselves, their family, and their estate. Being intestate means the deceased will have no say in how the estate leftover is dispersed or to whom.
It is important to correctly write a last will and testament. This document will determine where your assets go after you are gone. Estate planning is choosing where the lump sum of everything a person owns goes. It is never too early to for estate planning and is always a good idea to have a trusted attorney to help you create a valid last will and testament.
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