There are instances where inherited property such as a house or parcel of land from a deceased relative need to undergo several legal processes in order for the beneficiaries to take ownership of the property. This case usually happens when assets are named solely in the deceased name and no other names attached. This process is called the probate process.
While the intention of the legal process is to solve disputes, there are cases where it turns out that the beneficiaries turned out spending more than the amount of the asset they’re trying to recover. Here comes the question, Is the probate process really necessary? Laura Wallace Henderson of Legal Zoom explains why is a probate process necessary.
Why Is Probate Necessary if There Is a Will?
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State laws regulate the probate of estates. Probate is the judicial process that provides legal supervision of estates after the death of an individual. If you leave a will at the time of your death, the probate court will help ensure that your final wishes receive due consideration. The probate process can be very involved and drawn out, especially in complex estates and instances where individuals contest the legitimacy of the will.
Purpose
While a will provides instructions for the division of an estate, including the guardianship of minors, distribution of personal belongings and division of financial assets, probate protects the rights of creditors and entitled beneficiaries. Probate courts can help determine the validity of a will and claims against estates. As long as you hold belongings in your name at the time of your death, your estate must go through probate, regardless of the existence of a will. However, if you die without a will, the court can decide who to appoint as the administrator of your estate, who to designate as the guardian of your children, and how to divide and distribute your assets.
Opening an Estate
Filing the original will and certified death certificate starts the probate process. The court assigns a case number for the estate proceedings and legally appoints your executor to perform the necessary duties involved in administering your estate. The court provides legal documentations, known as letters of testamentary, allowing your executor to manage your assets and pay your debts. Read the rest of the article here…
Now you know the importance of the probate process even if the will of the deceased person is present. The probate court then makes sure that the content of the will receive due consideration. Here comes the second question, when is the probate process not necessary? FindLaw explains in complete details when is probate not necessary.
Probate gets a lot of negative press. You’ve probably heard stories about how time consuming and expensive it can be. Fortunately, not all property needs to go through this legal process before it passes to your heirs. So, you ask, when is probate not necessary?
The quick rule of thumb is probate is not required when the estate is “small”, or the property is designed to pass outside of probate. It doesn’t matter if you leave a will. Let’s take a closer look at each of these exceptions.
Benefits of a Small Estate
Being small can have its advantages when it comes to probate. Most states recognize the complexity of this legal process is unnecessary for transferring a modest estate. So when the deceased’s remaining property is valued below a state-determined amount, assets can be distributed to beneficiaries without going to court. In California for example, an estate valued at $150,000 or less may not need to go to court. In Nebraska, the threshold is $50,000 or less.
Figuring out if your estate qualifies as “small” only takes a few simple steps.
Total up the value of your “individual” property. This typically includes bank accounts, investment accounts, business interests and real estate. The value of your personal effects, such as electronics and artwork, are also factored in. It’s unlikely more disposable items, such as your shoe collection, will be considered.
Subtract the value of property with a co-owner or designated beneficiary. This topic is reviewed in greater detail in the next section. What you need to know for now is that only assets titled in your name alone, and without a listed beneficiary, go to probate. For example, a life insurance policy with a beneficiary is not included in determining your estate value. Neither does a home held as community property.
Determine your state’s small estate threshold: All 50 states and the District of Columbia have laws governing most aspects of estate planning and probate. This includes setting the value of the estates that must go to probate. Look up your state’s probate laws to determine the exact procedure.
After knowing when or when not necessary to have a probate process, the decision being the property’s beneficiary depends on you and the rest of your family. You also need to know the cost of the probation process, and if it’s worth it given the amount of the property you’re going to claim. If it’s not worth it, then much better to just avoid the grueling probate process.
Julie Garber wrote an article in The Balance on how to avoid the probate process. Read the article below to learn more.
Why You Might Want to Avoid Probate and How to Do It
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Depending on who you talk to, you might have heard that probate really isn’t all that bad and that it doesn’t cost that much or take too long. Or you might have heard that it’s a long, protracted, expensive nightmare that should be avoided at all costs.
It all comes down to how complicated and extensive an estate is. Some estates are so small they don’t even require probate. Others are quite large and deliberate and meticulous legal planning is required to avoid the probate snarl.
But what if you just have an average estate? You might still want to arrange your estate to avoid probate. Here are the top reasons why.
01 Your Family Might Have No Immediate Access to Cash
Yes, it’s true. It can take weeks or even months to gain access to a deceased person’s cash, and your heirs will be stuck footing the bill for everything from the funeral to your household utilities during that time. They’ll have to maintain property insurance, and pay taxes and possibly storage fees until probate is officially opened and your estate can pay its own bills. Your property and insurance policies must be maintained until that time.
Your family probably won’t be able to access the cash in your bank accounts during this time period. If you have a spouse who doesn’t work and doesn’t have her own funds, this can leave her scrambling to pay for the most basic living expenses like groceries.
Avoiding probate can allow family members to have immediate access cash to pay bills, but it has to be done properly. Some legal mechanism must be in place to transfer the account to someone else without probate. Consider naming your spouse or another family member on the account. Talk to an estate planning attorney about how best to do this because laws can vary by state.
02 A Probate Judge Can Get in the Way
Court approval is often required for every little thing during probate, including running or selling the deceased person’s business, repairing or selling real estate, or abandoning worthless assets—think timeshares with high annual maintenance fees. Avoiding probate means your family won’t have to deal with interference in family and financial matters by a probate judge. Learn more here…
The probate process is provided by the law to help beneficiaries of inherited will take ownership of the asset left by a deceased person whether a written will is persent or not. Next is to evaluate the pros and cons of undergoing the probate process especially the cost and the returns. Knowing these information is crucial to know if you continue the probate or completely avoid it.
Once you have successfully recovered the property such as a house and want to sell it fast and divide the cash to the rest of the family, then we at Dependable Homebuyers can help you sell your house fast, easy and hassle free. Want to know more? Visit us on https://www.dependablehomebuyers.com and let’s get started.
