Discover What Probate Is & 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 and dragged on for years.
Your Money Do this week is to get a better understanding of what probate is, and when it may be necessary.
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. So, if have a Last Will, your loved ones may end up in Probate Court after your death! The probate process is also used if an individual dies without a Will.
Probate is necessary if you own assets in your sole name at death and there are no joint owners, beneficiary designations, transfer on death or payable on death instructions on the account.
Types of Assets And Accounts That Typically Avoid Probate
Jointly Owned Property – such as joint with right of survivorship between spouses or joint bank accounts.
Accounts and Assets with beneficiaries or transfer on death directions or payable on death provisions.
In addition, the State of Wisconsin has a small estate settlement option that avoids probate, if your individual assets are less than $50,000 in total. The amount and options vary by state.
Additional options available to avoid probate include Revocable Trusts, and potentially Marital Property Agreements in some states.
When Probate Could Be A Better Option
In some circumstances, probate may be a better course of action, such as:
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 your estate plan, the probate court is the final decision maker on any disputes that may arise.
If Probate Is Necessary
If probate is needed, the named personal representative will open an estate proceeding in Probate Court to be legally appointed to act on behalf of the estate. 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 there is always a process to settle one’s affairs after death even without probate.
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.
If you are concerned about Probate, you should get in contact with an estate planning attorney that can advise you on alternatives and help implement a comprehensive estate plan.