Maybe it’s the confusion because of so many differences between states or it could be confusion surrounding the debate of whether an attorney is necessary to avoid probate. At any rate, this week, we explore the entire probate quagmire and why getting the facts can make all the difference for the loved ones left to cover the bases after death.
Some say probate is burdensome – and it is. It’s also expensive and time consuming. The laws – both state and federal – certainly don’t ease the burden, but taking the time to cover the bases ensures your loved ones never have to worry about it. Knowing the facts means better choices.
Probate is simply passing one’s estate to the legal heirs or those named in a will. It addresses the property and assets that were owned exclusively by the deceased and if any property is jointly owned, it is not included. The assets might include homes, cash, retirement accounts, trusts or anything else considered part of one’s estate and deemed worthy.
When a will is part of the legal estate plan, it will include the choice of the deceased in terms of who he wishes to carry out the role as executor. Typically, if a person is not a convicted felon, 18 years of age and who has the mental capacities to understand his responsibility, the courts will accept that person. If there is no will, the courts will name an executor.
If you named an executor years ago, the courts will make every effort to locate that person in your will. One’s attorney, banker or best friend can be named if the client so chooses. If there’s not a will, the court will make every effort to locate your next of kin.
Once those matters are settled, the executor will then be asked to inventory the asset and memorialize it for the court. Creditors must be named as well as bank accounts and safety deposit boxes. Typically, a new bank account is opened in the name of the estate so that the executor has an easier time carrying out his responsibilities.
At that point, taxes will need to be paid. This will depend, of course, on the state and other tax exemptions that are in place. Typically, though, up to a twelve month window is allowed to provide ample time for closing the estate. Not covering those bases could result in penalties against the estate. If for some reason the deadline isn’t possible, the executor may apply for an extension. The probate attorney will be able to provide assistance in these matters so that the executor can adequately complete the tax requirements.
Once the estate has been balanced, the executor will then begin distributing the estate according to the will. This can take time to ensure the creditors have been satisfied. Once those responsibilities have been carried out, the executor or administrator will then file a final report with the probate court, which officially ends his duty to the estate and the deceased.
In estate planning, the goal is to ease the probate process. By ensuring trusts are set up properly and even ensuring assets are owned jointly, one can significantly ease those delays and responsibilities. This is just one more reason why professional legal guidance is so important.
Probate can be avoided in many instances. By setting up trusts or keeping everything in a joint ownership status can often allow you to bypass probate. Again, you’ll want to speak with an estate planning lawyer so that there are no missteps and to ensure you’re in compliance with both state and federal laws.
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- Leaving Assets Can Be Tricky – Part 2 - August 6, 2020
