If a descendant leaves a will directing to whom his property must be left or distributes it before his death, then the probate court will decide if it should be given proper effect. Nevertheless, if the descendant leaves no will behind, then the court will appoint a Personal Representative in order to distribute the property according to the laws of the Descent and Distribution. The laws are usually distributed based on hereditary succession.
Additionally, this process includes collecting all of the descendants assets, liquidating liabilities, paying the taxes and distributing property to the heirs. The procedures concerning that of probate are governed by state laws. The laws associated with the probate, have often been a subject of major debate and reform ever since 1960.
What Assets Must Go Through Probate?
This process is basically necessary for the following properties:
- Property that is solely in the name of the deceased person. For eg: real estate, car.
- A shared property – for eg: a property of the deceased person owned in the name of another person.
These properties are also known as probate estates. Furthermore, if there are any assets that require court proceedings, then it is the responsibility of the executor in the court to open a case and reach its conclusion. Nevertheless, the person in charge can opt to hire a lawyer to help with the court proceedings and pay the fees from money in real estate.
A common misconception is that if one has a will, then you don’t need to go through this process. Although, some states require this to be irrespective of whether you have a will or not, it is not necessary to get in touch with an attorney or a local probate court and find out the necessary legal requirements. In absence of a will, the state government and the state law will determine the way in which the property will be dispersed.
What Are The Assets That Need Not Go Through Probate?
Consequently, most of the assets in an estate don’t need to go through the probate process. For instance, if the owner has a wife or husband and has joint accounts, then going through the procedure is not necessary. In such a case, probate is not necessary. Furthermore, there are some more assets that don’t require such court proceedings.
- Retirement Accounts
- Life Insurance Proceeds
- Living trust properties
- U.S. saving bonds registered in payable-on-death form
- Pension distributions
- Wages, salary
Additionally, most of the U.S. states offer simplified probate proceedings for small-valued estates. Furthermore, a simpler process known as the “summary probate”is often used by the executioner, if the total subject property is under a certain amount. This amount varies greatly from different state to state. Since, one can only count the assets that must go through the probate, a few of the very large estates can take high advantage of the small estate procedures.
What Happens When There Is Joint Ownership In An Estate?
When there are two or more people with rights of survivorship, the property then transfers on to the survivors of the descendants. This is an automatic process and the court or law won’t interfere in the matter. A title document must be there, sharing the rights of survivorship. In addition to real estate, joint bank accounts too come under survivorship rights.
3 Types Of Assets That Must Go Through Probate
- Individually Owned Assets
Individual assets are those, which must go through probate at all costs. These assets have only one owner listed. Some individual assets are vehicles, investment accounts and bank accounts. Some items that don’t have a title document also become a part of the probate process.
- Tenants-in-Common Assets
Under this arrangement of property, each person has a certain interest in the property. The ownerships are either divided into 50-50 percent or even 80-20 percent. In case of joint tenancy, according to the rights of survivorship, the transfer will occur without the need for probate.
- Assets With No Beneficiary or A Predeceased Beneficiary
There are some assets which allow to name a beneficiary. Such examples of assets are life insurance policies. In a life insurance policy, when the owner passes away, the policy will not have to go through probate. But, in case if you haven’t named a beneficiary, then the court will take over the estate and the law will govern the probate estate.
A person is in control of what happens to his or her property when one passes away. Setting up proper financial houses will not only benefit the owner but the heir of the owner too.