Probate is a legal process through which the authenticity of a will is determined. Once a will is proven valid, all the assets are divided and the will is judicially executed. Probate is also the procedure through which a will can be contested.
The probate process can be very time consuming and expensive, as it involves probate courts and procedures including statute set fees for attorneys, executors and administrators. These fees may vary from state to state, and a Will does not avoid probate exclusively. Probate can only be avoided with a proper estate plan, such as what you can accomplish by retaining en experienced estate planning attorney like the Alexander and Associates Elder Law firm located in Raleigh, North Carolina.
Assets passing to an heir with or without a will (intestate) have to go through the process of probate court, as follows:
- The purported will is entered in the court by the heirs or by someone who wants to contest it.
- After hearing evidence, the court decides if the will is valid or invalid.
- Then a representative is appointed by the state court who takes over all the assets of the deceased.
- A notice or publication is made to general public and the relatives, to file any claims against the estate if applicable.
- Firstly, all the claims and debts are paid out.
- Then the remaining funds are distributed among the beneficiaries and assets are divided according to law.
- A guardian is appointed for minor children and disabled.
- Finally, the will is executed.
Any prudent person would definitely like to avoid all the stresses, expenses and time consuming procedure involved in a probate, so here are some pointers:
- Make sure you have a beneficiary designated wherever possible.
- All life insurance policies include beneficiary designated.
- All bank accounts have “pay on death” designated.
- Similarly, all brokerage accounts have “transfer on death” designations.
- House can be transferred using a life estate deed.
- Make a family member vehicle beneficiary designated.
- Estate planning can include joint tenancy with legal rights, joint ownership etc.
- Also you can make lifetime gifts.
- Revocable Living Trusts.
- Married couples can escape and reduce tax exposure similarly.
Another option available is joint title with right of survivorship or tenancy by the entries. Here, husband and wife properties will pass to the surviving co-owners simultaneously, but the drawback is probate process may take place after the last co-owner dies.
Assets held in revocable living trust will also avoid probate and can provide great relief in the event of incapacity of the maker of trust. Trusts can also prove very helpful in case of minor or disabled children welfare. A ‘special need trust’ can be created, for management and disposal of assets.
The whole point is to know legal rules and plans appropriately, there is a lot of leading and misleading information available, one can never be too cautious. At the end of life death is never easy, but at that time no family member should have to go through the tedious process of probate.