Understanding Probate and How to Avoid It - Part 1

Without a comprehensive estate plan, your assets may be subjected to probate, a court process that can be time-consuming, expensive, and public. Avoiding probate is a key goal of most estate plans, aimed at keeping your family out of court. In this two-part series, we'll delve into the probate process, its requirements, and explore strategies to help your loved ones avoid it through wise planning.

Probate is required for individuals with no estate plan, those with only a will, or when a will is deemed invalid. Even with a will, probate is inevitable upon your passing. To prevent your family from facing probate and potential conflict, it's essential to go beyond just having a will and utilize additional estate planning methods.

Dying without a will results in intestacy, where probate is needed to settle debts and distribute assets based on state laws. Priority typically goes to spouses, children, parents, siblings, and more distant relatives, with assets going to the state if no living heirs are found. Some states offer simplified probate for estates with a low value.

How Probate Works

Authenticating the Validity of Your Will

Your executor files the will and death certificate, initiating probate. The court authenticates the will, ensuring it complies with state law. Beneficiaries and potential heirs are notified and can contest the will's validity.

Appointing the Executor or Administrator

The court formally appoints the executor named in the will or selects a personal representative for intestate cases. A bond might be required for the executor, acting as insurance for potential errors during probate.

Locating & Valuing Your Assets

The executor identifies and appraises all assets, including those not listed in estate planning documents. A comprehensive asset inventory is crucial to prevent assets from being lost.

Notifying & Paying Your Creditors:

Creditors are notified, and valid claims are paid from the estate funds. A limited period is given for creditors to make claims, which the executor can challenge.

Filing & Paying Your Taxes

The executor handles outstanding taxes, including income, capital gains, and estate taxes, if applicable. Most families won't face estate taxes due to high exemption thresholds.

Distribution of Your Remaining Assets

After debts and taxes are paid, the executor petitions the court to distribute assets to beneficiaries according to the will or intestate laws. Once completed, a petition is filed to formally close probate.

Conclusion

Probate can burden your family with unnecessary time, expenses, and publicity. Proactive estate planning can spare your loved ones from this process. In the next part of this series, we'll explore strategies to avoid probate and keep your family out of court. Consider working with us, your Estate Planning Lawyer, for a Legacy Planning Session to create a comprehensive estate plan tailored to your needs. You can schedule an appointment with us today to get your affairs in order.

Next week, in part two, we’ll discuss the estate planning strategies that you can use to avoid the need for your loved ones to go through probate.