What is Probate
Probate is the term for a legal process in which a will is reviewed to determine whether it is valid and authentic. Probate also refers to the general administering of a deceased person’s will or the estate of a deceased person without a will. Probate is a legal process that administers the distribution of a deceased person’s assets. The process is overseen by a probate court. This court has the legal authority to decide matters related to wills and estates.
During probate, the court will determine whether the will is valid. They will also appoint an executor, locate and value assets, and pay the decedent’s debts out of the estate. The residue will then be distributed to the decedent’s beneficiaries and heirs.
How do I keep my heirs from having to go through probate?
Probate is also a public notice of death and lets creditors file claims against an estate. After the creditors get paid, the remainder of the estate goes to the beneficiaries. (If there is no will, the state decides how to distribute the property). Probate is automatic unless you do something to avoid it.
So why do so many people want to avoid probate? To avoid the long process (often six months to more than a year), to avoid legal fees (it’s probably going to cost thousands of dollars) and sometimes to avoid publicity, since probate proceedings are open to the public. The legal fees are usually paid from the estate.
Why might it sometimes be best to have an estate go through probate?
It could be less expensive than paying a lawyer to help you get around it. Also, the nice thing about probate is it’s a final decision for how an estate will be carved up, Probate shouldn’t be looked at as the worst thing in the world. Certain assets will automatically escape probate. For example, after the death of the first spouse if the couple owned property jointly with rights of survivorship (the property won’t avoid probate after the second spouse’s death, though). Also, when a beneficiary is named on a life insurance policy, a 401(k) or IRA or pension.
What is a will?
A will or testament is a legal document that expresses a person’s (testator) wishes as to how their property (estate) is to be distributed after their death and as to which person (executor) is to manage the property until its final distribution. A will directs who should receive property that is in your name only, without a designated beneficiary. Without a last will, property may be distributed by the courts to your next-of-kin, regardless of what your wishes might have been.
Do I need a lawyer for a will or can I do it myself with an online form?
No, you don’t need a lawyer, you probably should hire a lawyer to draft a will if you have multiple intended beneficiaries and a fair amount of assets. Most importantly, whether you hire a lawyer or do it yourself, just be sure you have a will. Having something is always better than having nothing.
Sadly, when it comes to wills, many Americans in their 50s and 60s have nothing. According to a recent Caring.com survey, 40% of boomers don’t have a will. Said Roper, who worked at Caring.com when the survey was done. Boomers are notorious for putting things off like saving for retirement, so I guess I wasn’t surprised the percentage was so low. An Ameriprise Financial survey found that only 50% of adults have a formal plan in place to leave money or assets to a loved one. And an RBC Wealth Management survey said that only 30% of high net worth and ultra high net worth Americans surveyed have a full wealth transfer strategy in place, including a will. The same percentage said they have done nothing to prepare.
What Is an Executor?
An executor of an estate is an individual appointed to administer the last will and testament of a deceased person. The executor’s main duty is to carry out the instructions to manage the affairs and wishes of the deceased. The executor is appointed either by the testator of the will (the individual who makes the will) or by a court, in cases wherein there was no prior appointment.
How do you pick an executor?
An executor is the person with the legal responsibility to ensure that your wishes for your estate are carried out, that assets transfer properly and that any bills, debts and taxes get paid. When choosing an executor, look for someone who is trustworthy and eminently competent to carry through your wishes. And someone sharp enough to recognize what they don’t know. You’ll want to name an executor in your will. Otherwise, the court will appoint someone. The key is picking someone whom you trust to get the job done. I often think it’s not a reward to be named an executor, It’s a job.
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FAQs
Why might it sometimes be best to have an estate go through probate?
It could be less expensive than paying a lawyer to help you get around it. Also, the nice thing about probate is it’s a final decision for how an estate will be carved up, Probate shouldn’t be looked at as the worst thing in the world.
Do I need a lawyer for a will?
No, you don’t need a lawyer, you probably should hire a lawyer to draft a will if you have multiple intended beneficiaries and a fair amount of assets.
How do you pick an executor?
Look for someone who is trustworthy and eminently competent to carry through your wishes. And someone sharp enough to recognize what they don’t know.
