Probate is the legal process of property distribution after the death of someone. The procedure is initiated by the deceased person’s estate executor or lawyer. In this legal process, the dead person’s will is validated by a probate court. Probate estate administration takes place by the court. They provide authorization to the estate executor to distribute the deceased person’s estate to the designated beneficiaries and pay back any unpaid taxes.
What happens when there is no will?
In the case of no will, an administrative proceeding takes place to decide the division of the estate held by the deceased. An estate administrator is assigned by the court, which is further responsible for the distribution of property according to guidelines issued by the court.
Probate is a complex process indeed. It leads to the loss of a large amount of estate in the form of probate fees to the government. It also leads to severe delays in the distribution of assets among your loved ones. Despite the complications, they can be avoided by following these tips.
Have a small estate.
Assess your state’s probate limits, as many states exempt smaller estates from the complicated procedures of process division. Their processes are sped up.
Distribute assets while you are still alive.
This helps in the reduction of estates as well as the elimination of federal or state estate taxes. The process gets simplified for you and your loved ones.
Prepare a living trust.
Trusts are an excellent option to avoid estate as the assets held in trusts are exempt from being counted as estate after death. The trustee is ultimately responsible for the trust distribution per the terms decided by the deceased person.
Establish accounts that are payable on death.
These financial accounts are transferred to the designated beneficiaries without going through the probate process.
Hold property with a joint owner.
This enables the transfer of assets after death without initiating the probate process.
Beneficiaries are designated for the transfer of properties like stocks, bonds, and other securities. Funds available in the bank accounts are exempt from this. This is known as “Transfer On Death,” or TOD. People designated for TOD are liable for joint beneficiaries.
Transfer on Death in the Case of Motor Vehicles.
Transfer On Death beneficiaries is designated for motor vehicles as well. They are legally entitled to handle matters about the vehicle after your death.
Transfer on Death in Real Estate.
A Transfer On Death Beneficiary is assigned for real estate. They help in executing and documenting the transfer of the deadly deed.