Probate:

What is it and what does it do?

Probate is the process that transfers legal title of property from the estate of the person who has died (the “decedent”) to his or her proper beneficiaries.

The term “probate” refers to a “proving” of the existence of a valid Will, or determining and “proving” who one’s legal heirs are if there is no Will. Since the deceased can’t take it with him, probate is the process used to determine who gets his or her property.

Even if a person dies with a Will (which is known as dying in “testate”), a court generally has to have an opportunity to allow others to object to the Will, and if there are any objections, to determine if the Will is valid, because it is always possible that one of the following seven items have occurred.

Possible

objections to a will

  1. There was a later Will (which, if valid, would replace the older Will), or
  2. The Will was made at a time the deceased was not mentally competent to make a Will, or
  3. The Will was the result of fraud, mistake or “undue influence” or
  4. The Will was not properly “executed”, or
  5. The so-called Will is actually a forgery, or
  6. For some other reason (such as a pre-existing contract) the Will is not fully valid, or
  7. There are other claims against the deceased’s estate that impact what the beneficiaries under the Will would receive

Details

about probate

There are many reasons why going through probate is very undesirable.
Four of the most obvious are:

Cost

Attorney’s fees, executor’s fees, and advertising all account for charges that can add up to 10% to the cost of probate. The executor can charge up to 5% of the estate value. In addition, taxes can take up to 55% of some assets if planning is not done properly.

Time

If everything goes smoothly, it can be as quick as a couple of months. It has been estimated that the average time is a little over nine months. Probating an estate while on of the spouses is survived goes much quicker. When you pass assets out of the marriage union, it can take considerably longer.

Public

Because the process includes public announcements and a court process, anyone who wants to know the details can check them out. A simple trip to the courthouse or as in some states, you can pull the information up on the computer in your living room.

Contestable

At any time during the probate process, anyone can contest the ownership of the deceased assets. Once a claim is filed, all assets are frozen and each side (the one making the claim and the executor of the estate) must prove their side to carry out the transfer of the estate. Once this happens, the other three issues can increase dramatically.

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This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. Please consult with a professional specializing in these areas regarding the applicability of this information to your situation.