(1) The family was dysfunctional to begin with and now that mom and dad have both died, the beneficiaries’ (usually children) true nature is revealed. They argue over who gets what and how mom or dad always favored so and so.
In general, when a person dies the function of the probate court is to ensure the following: 1 If there was a Will, it is the decedent’s true last Will, and not a forged or revoked version 2 The decedent’s assets are safeguarded and protected from waste, theft, or neglect 3 Valid bills and debts are paid, including death taxes, if any 4 What remains is paid to the intended beneficiaries in accordance with the decedent’s valid Last Will and Testament.
Using a living trust does not avoid probate fees. KEEP IT PRIVATE…. If you have a Will and go through probate administration, your Will becomes a public document that anyone can read. The terms of a living trust, however, are not public.
A trust, in general, is a written document that explains how you want any money in the trust to be spent during your lifetime and how you want any money in the trust distributed after you die. A trust is an arrangement among three basic parties: (1) the grantor who creates and funds the trust (typically also the trustee of the trust while alive) ...
The living trust should also name a successor trustee to take over managing the trust should the original trustee no longer be able to carry out the duties. A living trust is revocable, meaning that the grantor can amend or revoke the trust at any time. Let’s say you are the grantor, meaning that you created the trust.
No separate income tax return is necessary so long as you are the trustee or co-trustee. On the other hand, since a living trust is revocable and you retain control over the assets, any assets in the living trust at your death are includable in your gross estate for estate tax purposes. This is an important point – – a living trust does not ...
A living trust is a very flexible planning tool that has very practical applications, but this does not mean that everyone needs one. The decision to use a living trust cannot, however, be made in a vacuum–it must be viewed in light of your assets, wealth, and family relationships.
One of the most popular ways to avoid probate is through the use of a revocable living trust. Assets are placed in the trust, but they can used by the trust creator during his or her lifetime. Upon death, assets in the trust are passed to the trust beneficiaries just by operation of the trust document. No probate is necessary.
If a person dies and leaves a will, then probate is required to implement the provisions of that will. However, a probate process also can happen if a person dies without a will and has property that needs to be distributed under the state intestacy law (the law of inheritance).
Payable on death accounts operate the same way. Real estate that is owned as joint tenants, or joint tenants by the entirety passes outside of probate as well. This type of property has two owners.
Some people don’t want to probate a will. There is no requirement that a will or property go through probate, but if the decedent owned property that is not arranged specifically to avoid probate, there is no way for the beneficiaries to obtain legal ownership without it. There are some exceptions to this.
With careful planning, probate can sometimes be avoided. Still, probate doesn't have to be a scary process. Probate sounds like a complex and expensive process. However, probate is actually a very common legal procedure and is the way that some assets must be formally passed from the person who is deceased to his or her heirs or beneficiaries.
A probate attorney is a state-licensed lawyer who can help the Executor of a Will (if one was appointed) or the beneficiaries of an estate get through probate as they work to settle an estate.
Also known as a probate lawyer, probate attorneys are hired to help settle an estate. After the death of a loved one, their Estate Plan dictates the next steps. If they have a Will, probate will be necessary. Trusts won’t go through probate, which can sometimes make the process a bit less complicated and much more private.
Whether or not you need a probate lawyer will depend on multiple factors and scenarios. You’ll want to consider things like:
If you do end up using a probate attorney, there are a few things you should know before retaining one. Asking questions up front will ensure there are no (costly) surprises along the way. Use the following list to help you find an attorney who will be the right fit for your exact needs.
Probate can take months, or even years in some cases, to complete. Assets placed in a revocable or irrevocable trust can pass directly to the beneficiaries upon the death of the grantor, ...
Trusts are normally used as part of an estate plan. Trusts help offer multiple benefits to the beneficiaries of a decedent upon death. Such as avoidance of probate as well as potentially avoiding payment of estate taxes. Benefits to the decedent include the ability to control how the trust assets are used even after death.
Two forms of trusts. There are two basic forms of irrevocable trusts. Some irrevocable trusts are created and funded during the grantor’s lifetime and can come in many forms. For example, a qualified personal residence trust (QPRT) can hold the grantor’s primary or secondary residence and reduce its taxable value for estate purposes.
An irrevocable trust is a valuable tool because it avoids the probate process. When a grantor places property into an irrevocable trust, he or she no longer owns those assets. It is then the trustee’s responsibility to distribute the property according to the terms of the trust.
A grantor retained annuity trust (GRAT) can potentially allow money to be transferred to heirs without any estate tax liability. There are many different types of irrevocable trusts that can be created, each with its own setup procedures and legal considerations.
State laws govern trusts. However, in most statesmen irrevocable trust, can only be modified by agreement of all beneficiaries and the grantor. If still alive, or by a court. Because of the nature of these trusts, assets placed in the trust are trust property from the moment of creation of the trust. This aspect of an irrevocable trust provides two ...
Assets in an irrevocable trust have greater protection from creditors and anyone else seeking to obtain a judgment against you. You no longer own the assets (the trust does), so they are protected to the extent that bankruptcy and insolvency laws do not allow a clawback of such assets.
The benefits of avoiding probate are: It’s often simpler and faster for account beneficiaries to claim the funds. You’ll avoid probate court fees and executor’s fees (which can be significant, especially if the executor is legally entitled to a certain percentage of the estate, such as in California).
Probate is the legal process of administering a person’s estate after their death. If you have a last will and testament, probate will involve proving that your will is legally valid, executing your instructions and paying applicable taxes. Having a clearly written will is one way to make the probate process easier on your loved ones.
An executor can’t jump right in and start passing along family heirlooms and inheritances. The first step is filing a petition with the probate court to open the process and “prove” the will. Until that happens, they’re not allowed to distribute or discard any property.
If you die without a will, the probate court will rely on your state’s intestate law to figure out how to distribute the person’s stuff.
Administrator: A court-appointed executor, if someone dies without leaving a will. Intestate: A case where someone dies without a will. Intestacy: State laws determining how to distribute such estates. Letters testamentary: A document from a probate court authorizing the executor to start carrying out the will.
Small estate affidavit, summary probate and/or summary administration: Documents or processes that can allow you to skip or shorten certain aspects of probate (i.e. distribute property without a lengthy court process). Estates below a certain value (depending on your state) are eligible for this. Related Articles.
After all the assets have been distributed, sold or discarded—and the court and executor’s fees have been paid—the last step is filing a petition to dissolve the estate and conclude the probate process.
a share of property owned as " tenants in common "—for example, the deceased person's interest in a warehouse owned with his brother as an investment. This property is commonly called the probate estate.
If there's no will, or the will doesn't name an executor, the probate court will appoint someone to serve. Either way, the person in charge can hire a lawyer to help with the court proceeding, and pay the lawyer's fee from money in the estate.
In addition, most states offer simplified probate proceedings for estates of small value. The simpler process is commonly called " summary probate .". The executor can use the simpler process if the total property that is subject to probate is under a certain amount, which varies greatly from state to state.
Cars or boats registered in transfer-on-death form (allowed only in some states) Vehicles that go to immediate family members under state law. Household goods and other items that go to immediate family members under state law. In addition, most states offer simplified probate proceedings for estates of small value.
Assets that generally do not go through probate are (1) jointly owned assets that transfer to the surviving owner, (2) assets that have a valid beneficiary designation, and (3) assets that are in a trust. However, these assets do not always avoid probate.
If your beneficiary dies before you or at the same time as you, the proceeds will have to go through probate so they can be distributed with your other assets. If your beneficiary is incapacitated, the probate court will probably take control of the funds through a guardianship/conservatorship.
If you name a minor as beneficiary, a probate court will probably have to establish a guardianship for the child.
About the author: Vickie Schumacher is author of the best-selling book, Understanding Living Trusts®, and is nationally known for her ability to explain the benefits of living trusts and estate planning in clear, conversational English.
Some assets—including insurance policies, IRAs, retirement plans and some bank accounts—let you name a beneficiary. When you die, these assets will be paid directly to the person (s) you have named as beneficiary without probate. Well, that is the way it is supposed to work, but it doesn’t always happen that way.