Money Do – Discover What Probate Is And When It’s Needed
Probate may be one of the most misunderstood parts of the estate settlement process. Unfortunately, the term “probate” has garnered some negative connotations through headlines and heavily-publicized cases that have gone wrong.
This week’s Money Do is to discover what probate is and when it’s needed.
Probate is the court-supervised process to validate an individual’s Last Will & Testament and legally transfer ownership of property to the named beneficiaries, while protecting the rights of all heirs and creditors. That’s right, having a Will alone does not avoid the probate process. The probate process is also used if an individual dies without a Will.
You may think that avoiding probate is a less expensive path. While there are filing fees and attorney fees that accompany probate, they’re not always avoided or eliminated when there is no probate proceeding.
Types Of Assets And Accounts That Typically Avoid Probate
- Because a Will only passes assets in your individual name, joint ownership and/or beneficiary designations on various assets may help to eliminate the probate proceeding. However, we recommend exercising caution when doing so, since it may add complexity at your death, and multiple heirs become co-owners of property.
- In addition, if your individual assets are less than $50,000 in total, the State of Wisconsin has a small estate settlement option that avoids probate.
- Additional options available to avoid probate include Revocable Trusts, and in Wisconsin, married couples can use a Marital Property Agreement.
When Probate Could Be A Better Option
In some circumstances, probate may be a better course of action.
- If you were to die with minor children who need to have a legal guardian appointed to take care of them going forward.
- If you die with more debts than you have assets, as the probate court will help settle your final debts with your creditors.
- When family members and beneficiaries do not get along and may contest any aspect of the Will, the probate court is the final decision maker on any disputes that may arise.
If Probate Is Necessary
If probate is needed, when you die, the named personal representative will present the Will in probate court, opening an estate proceeding. The probate process is public in nature and, on average, takes between 9 and 15 months to complete. The time-frame is not necessarily shorter when using some of the other non-probate transfer options previously mentioned, as the process to settle one’s affairs is still required after death.
- Estate proceedings are often done under the guidance of an estate or probate attorney.
- The personal representative is given all powers necessary to settle your affairs, which includes the power to identify, collect, and manage assets while ensuring all debts, expenses, claims and taxes are paid prior to making any distributions to named beneficiaries.
- During the court process there are a variety of filing and notice requirements that the personal representative must adhere to along the way.