Many people are confused about the role of probate court and
the types of cases handled. One of the primary roles of this court is to
oversee settlement proceedings of decedents estates. However, other important
cases are handled here including elder law, legal name changes, guardianship,
and adoption.
When a person passes away their estate is settled under the
guidance of probate court. Two types of probate exist, including testate and
intestate. Testate estates refer to estates where decedents prepared a last
will and testament to bequeath assets to heirs. Intestate estates refer to
cases where a Will was not prepared and no directives for asset distribution
are provided.
If a Will is recorded through the court all estate assets are
suspended until probate proceedings are completed. If a Will is not provided,
additional steps are needed to validate rightful heirs.
Probate proceedings vary depending on decedent's
circumstances. However, settlement involves reconciling outstanding debts and
taxes; transferring property deeds to beneficiaries; and distributing assets
and personal belongings to heirs.
Most people find it helpful to retain services from an
estate lawyer. Probate proceedings can be complicated and require substantial
paperwork. The process can become overwhelming if individuals file a claim
against the estate or if heirs contest the last Will.
The average duration of testate probate is six months, as
long as no claims are made against the estate. Intestate probate generally
takes two to three months longer to reconcile.
With testate estates, the designated Administrator can
commence with duties upon recording the Will with the court. With intestate
probate, a judge has to confirm an Administrator prior to starting proceedings.
It is illegal for anyone to take action of any sort without court confirmation.
One major disadvantage of having estates settled through
probate court is that assets oftentimes depreciate in value. Beneficiaries may
have to pay inheritance tax based on the date of death value rather than the
actual value at the time of estate reconciliation.
Another problem heirs face is they might not receive any
inheritance at all if the decedent has substantial amount of outstanding debt.
All creditor debts, personal, business, and estate taxes must be reconciled
before assets can be distributed to beneficiaries.
Rather than endure probate proceedings, people can setup trusts to transfer ownership of property. There are several benefits associated
with trusts. First and foremost, they substantially simplify estate settlement
and allow for ease of property transfer to beneficiaries.
Secondly, property held in trusts is exempt from probate so
there is no need for lengthy court proceedings.
Third, trusts offer privacy that is not available with
probate estates. Since Wills are recorded through court they are a matter of
public record and can be accessed by anyone who wants to view the contents.
Trusts remain private and only Trustees and beneficiaries are privy to what is
written in the Will.
It is advisable to work with an estate planning law firm
when establishing trusts. Experts can advise of the different types of trusts
and the pros and cons of each. Much depends on personal circumstances and
lifetime goals. A few of the more popular include children's trust funds,
living trusts, revocable and irrevocable trusts, and family trusts.
Taking time to develop
an estate plan will provide peace of mind while you're alive and relieve
some of the burden from loved ones when you're gone. Even if relatives have to
endure probate court, writing a Will can lessen the amount of time needed to
reconcile the estate.
