If you are confused about exactly what probate is, you are not alone. Probate, in a nutshell, is the legal process that occurs when a person dies and their will is validated and administered. When the person in question, however, has no will, they are said to have died intestate, and the probate process involves distributing their estate in accordance with the state’s laws of intestacy.
In other words, it’s a complicated legal process, and having a better understanding of how it works can help you conquer your own estate planning concerns. Another important step you can take is checking in with TrustHandled, which offers the tools and guidance needed to create the kind of estate plan that affords you the peace of mind you’re looking for – knowing your wishes will be upheld, and your legacy will live on with your loved ones when the time comes through a comprehensive estate plan.
Probate with a Will
When someone who has a will dies – known as the testator – the will enters the probate process. The will itself is a manifestation of the person’s last wishes and guides how their assets and belongings will be distributed to family members, loved ones, charities, or any combination of these. Generally, the will appoints an executor or administrator who guides the probate process. If no administrator is named, the court appoints one.
The assets that are addressed in the will of the individual in question are distributed in accordance with the directions provided. If, however, there are any assets or properties that aren’t included in the will – or in another estate planning tool, such as a trust – they must be addressed by the court in accordance with state law.
Probate without a Will
When the person who dies has no will, their estate itself enters into probate, and the person is said to have died intestate – instead of being the testator. This can also happen when a will is deemed to be legally invalid. In such instances, the intestate estate is distributed in accordance with the laws of the state. The court typically assigns an administrator to guide the probate of estates that are intestate.
The Administrator’s Role
The administrator or executor of the will or estate in question plays an outsize role in the process, including taking on all the following responsibilities:
- Locating and overseeing all the testator’s assets
- Estimating the value of the overall estate by implementing one of the methods specified by the IRS
- Paying off any debt and taxes owed by the testator – creditors typically have a specific amount of time in which they can make claims against an estate – and resolving any related disputes in court
- Filing the personal income tax of the testator
- Addressing any estate taxes that are pending, which are generally due within a year of death
- Seeking the court’s authorization to distribute everything that’s left to the deceased’s heirs
In most states, intestate estates are distributed hierarchically to the surviving spouse of the deceased and then to their surviving children. From here, other relatives are considered. If the decedent has no will and no legal heirs, their entire estate generally goes to the state.
Bypassing Probate
The probate process is lengthy, can involve a contested estate, can stir up family drama, and can be costly. Probate proceedings are also a matter of public record, which means there is no way to keep the involved settlements private. In other words, bypassing the probate process – or keeping as many assets out of the probate process as possible – is generally preferable.
Designated Beneficiaries
Some assets initiate beneficiaries via contractual terms, and in the process, they bypass probate entirely. Common examples include:
- Life insurance policies
- Pension plans
- 401k plans, individual retirement accounts (IRAs), and other retirement tools
- Medical savings accounts
- Assets that are owned jointly and include a right of survivorship
Trusts
A trust is a flexible financial tool that allows the creator – or the grantor – to create a legal arrangement, which secures their own assets for the benefit of named beneficiaries. While a trust can be challenged – much like a will can be contested – such challenges are less likely to be successful. Like a will, a trust includes an administrator, who is called a trustee.
Often, however, the grantor takes on the trustee role in a revocable trust, which means a trust that can be modified or revoked during the trustee’s lifetime. In these situations, however, a successor trustee who will take over the position upon the grantor’s death or incapacitation must be named.
Trusts can afford all the following benefits:
- They help to ensure that the wishes of the grantor will be upheld.
- They help to ensure that the included assets will avoid the lengthy, complicated, and costly probate process.
- They can help protect assets from lawsuits and the claims of creditors.
- For very large estates, they shield beneficiaries from estate and gift taxes.
TrustHandled Is Standing By to Help You Master Your Estate Planning Needs
At TrustHandled, we believe everyone deserves high-quality estate planning tools and the skilled guidance they need to properly employ them – at a price they can afford. The better you understand your own estate planning needs, the better prepared you’ll be to implement the tools you need, and our questionnaire-style process can help guide you seamlessly toward the state-specific estate plan that is right for you and that reflects your wishes in relation to your estate, which is a reflection of your life’s work.
Your estate plan guides your legacy and your commitment to your loved ones, and few things can afford you the peace of mind that a well-considered estate plan can. TrustHandled recognizes that too many people consider estate planning too complex or overwhelming to address, and as a result, simply put it off.
We’re here to help change all that with accessible products, clear guidance, online storage that protects your efforts from loss and destruction, and affordable prices, and we look forward to being there for you.
