Turning 65? What to Know About the 4 Parts of Medicare
If you are about to turn 65, then it is time to think about Medicare. You become eligible for Medicare as soon as you turn 65...
Read moreMost estate planning attorneys can help you craft an estate plan that minimizes or avoids probate altogether. Probate proceedings are part of the public record and can be very time-consuming and expensive. However, in nearly every case, to some extent probate is necessary. So, it’s important to understand how to navigate the process.
Probate proceedings seek to validate the decedent’s last will. In addition, this process retitles the estate’s assets into the name of heirs according to the deceased person’s wishes. A court supervises these types of proceedings to ensure that the estate pays its debts and heirs receive their assets.
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After losing a loved one, family members generally look for a properly written will and other crucial estate planning documents. Without a well-organized plan, relatives of the deceased may have to gather information needed by the court. This can mean that the probate process takes much longer.
The petitioner, usually the estate executor or personal representative, begins the process. First, they file a death certificate and a last will to the probate court. It is also useful to produce a list of known creditors and names and contact data of the decedent’s heirs. Smaller estates and those estates not contested by heirs can usually work through the process fairly quickly and efficiently.
Laws regarding probate are state-specific, and most states set valuation thresholds. If, for instance, an estate value is less than $75,000 and no one contests the will, hearings may move more quickly.
For larger value estates, there is a substantially greater amount of paperwork necessary. The process may include not only validating the will, but also the following:
A checklist of documents to gather may include:
The decedent’s residence state intestacy laws will apply if your loved one dies without a last will (intestate succession). All personal property without a beneficiary designation will be subject to the probate process at the court’s direction.
Some assets will avoid the probate process under state property title, state contract, or state trust law. These assets may include:
Complex probate processes can be costly and take years to finalize. This is why many individuals retain an estate planning attorney to minimize probate proceedings.
Lengthy proceedings can be frustrating for heirs who are rightful beneficiaries but must comply with the probate process. The average cost of probate varies by state. However, 5 percent to 10 percent of an estate’s value in administrative costs and legal fees is typical. Some estates may lose as much as 20 percent of their value as a result of the process.
Other fees may include executor compensation, court fees for filings and paperwork, and a probate bond. After the probate proceedings are complete, the court may refund the probate bond.
The most common reason for high probate costs occurs when someone contests the will, as ongoing litigation can be expensive. Issues relating to preparing and filing the decedent’s last federal estate tax return and any ensuing audit may also increase the cost of the probate process.
Most individuals create an estate plan with their lawyer that allows their assets to pass outside the probate process. Typically, this is possible by creating a revocable living trust. Depending on your situation, your estate planning attorney may recommend other types of trusts.
Be sure to review your estate plan with a qualified attorney as needed. Work with them to update the names of beneficiaries on any of your accounts that will pass outside of probate. An attorney can also help minimize probate court interactions and streamline your heirs’ inheritance process. Search for an estate planning attorney in your area today.
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READ MOREMost states have laws on the books making adult children responsible if their parents can't afford to take care of themselves.
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