Estate Planning for Probate
Probate is the legal process in which property is transferred after a person’s death. Probate is a court-supervised process and involves gathering of assets, paying appropriate debts and taxes, identifying inheritors and settling any disputes, and distribution of property.
Since the process can be long and expensive, planning your estate to create clear lines of inheritance and ownership is an essential consideration.
When a person dies, his or her estate is entered into probate. The process begins with the submission of the will for consideration and approval by the probate court. The will includes a named executor, a person who will gather the assets, pay the debts, determine the appropriate heirs, and distribute the property and assets. If there is no will, the court will appoint a personal representative or administrator to handle those duties. It is the responsibility of the executor or personal representative to identify the estate assets, notify creditors of the person’s death and allow sufficient time for claims to be made against the estate, settle any disputes among heirs, and ultimately, pay the decedent’s just debts and tax liability then distribute the remaining assets to appropriate heirs. The executor or personal representative’s responsibility also includes submitting documentation to the probate court.
Importance of Making a Will
Although thinking about our mortality and going through the process of deciding how we would want our possessions distributed after death may be unpleasant, dying without a will can create a long, expensive, and uncertain process for loved ones already suffering loss. In addition, making assumptions about how our property would automatically be distributed might lead to people inheriting more or less than we would have anticipated. By going through the process of making a will, you are in control of naming the people who will inherit your assets, and you can provide for your loved ones in the manner you think best.
As your estate planning and elder law attorney, Glenn A. Deig is a valuable resource to assist you in making a will that will meet legal requirements of your state and assure smooth transition of your assets to your heirs.
Because probate can be a long, complicated, and expensive process, many people choose to arrange estate planning that will allow them to avoid probate. There are several documents and arrangements that would achieve the goal of avoiding probate.
Joint property ownership with the right of survivorship allows property to be exempt from probate because upon the death of one owner, the property automatically reverts to the surviving owner. There are several forms of joint property ownership, but each requires a properly written document that sets out the joint ownership structure.
Designated death beneficiaries named on various financial assets and instruments automatically inherit the value of those assets upon the death of the owner, and the asset, therefore, does not become part of the decedent’s estate. Payable on death (POD) bank accounts, IRA or 401(k) accounts with a named beneficiary, and “transfer on death” registrations of items such as stocks, bonds, brokerage accounts, or vehicles will allow those assets to immediately become property of the surviving named beneficiary, again avoiding probate.
Revocable living trusts allow you to transfer ownership of property to a trust that you set up but can alter or revoke at any time. By transferring ownership to the trustee, you remove the property as part of your estate, so it is not subject to probate. Your instructions to the trustee can designate whom the property should transfer to upon your death.
Gifts allow you to simply give your property away before your death. This requires planning to avoid gift taxes and to assure that you can actually afford to give away assets you may need yourself.
As you can imagine, any of these strategies to avoid probate would involve careful estate planning and consideration of how they should be set up for the ultimate benefit of your estate and your heirs. With extensive knowledge of estate planning law, Glenn A. Deig will provide you with the guidance you need to produce these probate exempt instruments.