What Exactly Does “Probate” Mean?

What Exactly Does “Probate” Mean?

 

After a person dies, ownership (the legal title) of his or her property, assets and personal effects must be passed on (legally transferred) to the beneficiaries (heirs) listed in the Will. If there is no Will, the persons receiving assets are designated by State law. “Probate” is the legal name given to this process.

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After a person dies, ownership (the legal title) of his or her  property, assets and personal effects must be passed on (legally  transferred) to                                   the beneficiaries (heirs) listed in the Will. If there is no Will, the persons receiving  assets are designated by State law. “Probate” is the legal name given to this process.

First, the Will must be verified as the valid, final dispositive statement of the  decedent (the official record of the deceased person’s final wishes).  The Will generally names the person or institution appointed to  administer (manage) the probate estate process.When there is no valid  Will, State law governs who receives the assets of the deceased. The term “probate” is also used in the larger sense of “probating the  estate”.    Probate is the legal process by which:
  1. An Executor or Administrator, who takes over the deceased affairs and property, is appointed by a Court;
  2. The heirs are identified and located;
  3. The deceased’s property/assets are gathered and accounted for;
  4. The deceased’s debts and creditors are paid;
  5. Any income tax and estate tax returns are filed and the taxes paid;
  6. The estate assets and property are sold to create cash to pay bills, taxes and expenses of the estate.
  7. Payment and distribution is made of all remaining property, assets and cash to the approved heirs and beneficiaries.
How Long Until Heirs Receive their Distribution?
The probate process and distribution to the heirs can be as short as 6 months and as long as two to four years depending upon the State laws regarding creditors claims, whether there is property to be sold,  whether there are tax liabilities, whether there are disputes among  heirs, and congestion in the State courts.
For more information on the probate process Click Here and make sure to download a free copy of our Probate Timeline Diagram (Below).
The executor named in the Will is in charge of this process, and probate provides an orderly method for administration of the estate. If there is no Will, a personal representative or administrator is appointed by the probate court to oversee the  process. In some cases the executor is also called the personal  representative even if there is a Will. The executor is accountable to  the beneficiaries and must perform their administrative duties in a fair and legal manner; (If any doubts exist as to the competency of a chosen executor, the probate court may step in and supervise the executor’s  performance). The executor is entitled to a reasonable fee or “commission” for these services. Probate law generally permits and  encourages or provides for partial distribution prior to the final  distribution and closing of the estate.  During the period of  administration; some property and assets (or cash) may be distributed  rather than sold during this time. Inheritance tax laws often place the  executor or personal representative in charge of filing and making tax  payments. Thus, the choice of an executor is an important one.
The job of estate administration and accounting must be done  regardless of whether an estate goes through the probate process or  probate is avoided. In the recent past, lawyers and other professionals  have advocated the use of probate avoidance techniques (including  revocable Living Trusts) in states where the probate process was perceived as being too slow and too costly. Many U.S. States have adopted the Uniform Probate Code or simplified their probate processes over the years. In such states  there is now less reason to employ such probate avoidance techniques.
~ Estate Finance, LLC

 

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