Probate is the process of managing someone’s estate after they die. It can be a long, complicated process filled with red tape and rules that vary from state to state. Generally speaking, if you want to use your assets (known as your estate) after you pass away, you need to appoint someone to manage them for you during your lifetime.
This person is known as a personal representative or executor. If someone doesn’t do this, the court will appoint a representative. You might also hear this process called “probating” your will. Here’s what you need to know about probate if you have assets going through this process after you pass away.
What is the Probate Process?
The probate process is a legal process of managing your estate between death and the final distribution to your heirs. During this process, your estate is managed by a probate court, and an executor who oversees the process collects assets, pays debts, and distributes the remaining assets according to your will.
The probate process involves the following steps: Your heirs and beneficiaries must be identified, located, and notified about the probate process. This can be challenging if the beneficiaries don’t live in the same state as the deceased. The executor must be appointed. This must be done as soon as possible after the death.
The executor will manage the estate during probate. The executor must inventory the estate and its assets, including real estate. A list of all assets and their appraised value must be submitted to the probate court. All taxes and debts of the deceased must be paid, including estate taxes and any remaining debt the deceased had. The executor must distribute any remaining assets according to the will and state probate laws.
Why Is Probate Necessary?
Probate is necessary because it gives the probate court authority to carry out your wishes as stated in your will. The court ensures that your debts are paid and your assets are distributed according to your will. It also ensures that your beneficiaries are legitimate and that your heirs are entitled to what you’ve left them.
Without the probate process, the court would have no authority to do any of these things. It is important to note that the probate process can be avoided in certain circumstances: if your assets are held in joint tenancy with the right of survivorship, they will pass to the surviving joint tenant according to the law. If your assets are held in trust, they will pass to the beneficiary(ies) according to the terms of the trust.
Who Can Be The Executor And How Are They Chosen?
The executor is the person who will manage your estate during probate. You choose this person in your will. You can choose anyone you want, so long as they are 18 or older. The executor can be a family member, friend, or financial advisor.
Some people choose a financial advisor because the job is complex, involves tax and legal issues, and requires someone willing to serve without compensation. The executor is responsible for managing your estate and ensuring that your debts are paid, and your assets are distributed according to your will. The executor can be anybody, even a relative who is underage.
What Are The Duties Of An Executor?
The executor’s primary duty is to manage the probate process and ensure that your estate is distributed according to your will. Here are some other essential things to keep in mind:
- Identifying heirs and beneficiaries – Before an executor can distribute the assets in the estate, he or she must identify the people entitled to them. This is particularly important when there is money or real estate in the estate since these things must be transferred.
- Inventorying assets – The executor must inventory all assets and property in the estate and ensure that the heirs and beneficiaries are notified of the value of their inheritance.
- Paying debts and taxes – The executor must ensure that all the deceased person’s debts are paid. This includes paying due taxes and ensuring the deceased person’s mortgage is paid off.
- Applying for an executor’s certificate – After the estate is settled, the executor must provide the probate court with a certificate stating that all debts have been paid and that the assets have been distributed to the heirs as specified in the will.
When Can Assets Be Discharged From Probate?
Some types of assets are automatically discharged from probate. For example, assets held in an irrevocable trust are discharged from probate and are distributed to the trust’s beneficiaries according to the terms of the trust agreement.
If someone has named you as the beneficiary of their trust, and you have been given a gift card or gift, you will get the money immediately, outside of probate. You might also hear this process called “coming into probate.” Here’s what you need to know about probate if you have assets going through this process after you pass away.
Limitations On When Assets Are Discharged From Probate
If you have assets discharged from probate, it can mean significant savings in time and money. Here are some things to keep in mind:
- Insurance policies – Some insurance policies (particularly life insurance policies) are not discharged from probate but go to the named beneficiary immediately upon death. You would want to verify this with the insurance company.
- Money market accounts or savings accounts – Assets held in a savings or money market account are not part of the probate process. They belong to the bank, not you. The bank is under no obligation to distribute the funds to your heirs.
Probate is a necessary legal process that ensures that your assets are distributed according to your will. It is important to understand the process and how assets are discharged from probate. If you are married, you will also want to consider the impact of probate on your spouse. If you have children, you will want to ensure that the process goes as smoothly as possible for your heirs.