What is Probate and How do I Avoid Probate?

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Probate is, stated simply, a court-supervised process for transferring property to its intended recipients, following the death of the owner. The goal of probate is to re-title and otherwise transfer a decedent’s property to his or her heirs or other intended recipients, after paying all debts of the estate. The probate process typically involves the following general steps:

  1. Hiring of an attorney
  2. Opening of the estate with the probate court
  3. Presentation of the will (if there is one) to the court
  4. Appointment, by the court, of a personal representative of the estate
  5. Taking and reporting of the inventory of assets of the estate
  6. Payment of debts of the estate and settlement of similar matters
  7. Distribution of the assets of the estate to intended or legally entitled recipients
  8. Order of discharge from the court; closing of the estate

What Property Must Go Through Probate?

As a general rule, all property owned by a decedent at his/her time of death is part of the "probate estate" and is subject to administration by the probate court, in order to be legally transferred to a new owner. This includes all of the following items:

1. All property not indicated in a valid will

2. All property transferred by a valid will (Please note: having a will does not avoid probate)

3. All proceeds from accounts or insurance policies transferred to "the estate of"

Why Would You Want to Avoid Probate?

Much emphasis has been placed on probate avoidance in recent years, and for good reason. Probate is both costly and time-consuming, while also representing a difficult procedural headache for many families. Nonetheless, in some instances probate presents some meaningful benefits. On the whole, it is typically advisable to take the necessary steps to avoid probate, but the following represent the advantages and disadvantages of probate:

Limited Advantages of Probate

No planning: does not require any advance planning

Public Record: in some limited instances, an individual may desire a public record of the distribution of their assets

Family Quarrels: probate represents a formal adjudicatory process which may be desirable when family members are at odds with one another over assets of the estate

Major Disadvantages of Probate

Length: typically 7-12 months from death to discharge of the estate

Cost: usually between 4% and 10% of the gross estate

Hassle: length/cost, but also procedure and court filings require ongoing attention

Privacy: probate is public record, accessible to any and all

Next: How to Avoid Probate

 

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