There comes a time in our lives where we have to plan for the future. People write a will to make things easier for their loved ones. However, this isn’t always the case, and estate planning can be a lot harder than it may seem.
Read on to find out what it means to probate a will and when do you need to probate.
How and Why to Probate a Will
Probate of the will refers to a process that validates a deceased person’s will at court. Probate of a will involves identifying the deceased person’s assets, fulfilling their last debts, identifying the proper heirs, and distributing the property.
Probating a will means getting the court to recognize a particular will as the last and valid will of a deceased person. In the probate, the deceased person also specifies the executor of their will. Probate requires the notifications of heirs at law and giving them the opportunity to context, thus turning the probate into a full blown law suit. Different states have different probate laws, but the process does not vary much across the nation.
Letters of Probate
After the probate of a will, the court will assign special documents to the executor of the will. These documents include the letters of probate, which prove their authority to execute the will. These letters empower the executor with the authority to distribute the deceased person’s estate.
The executor will need the letters of probate to transfer assets, settle disputes, and recover any money third parties might owe to the deceased person.
Depending on the value of the estate, the letters of probate will incur different fees. In general terms, you should expect the fees to be $5 for every $1,000 of the estate. In most cases, the estate pays the fees, as well as any associated legal costs involved.
When Should You Probate Your Will?
Not every person needs probate of their will. The choice depends on the nature of your assets and the size of your estate, as well as the number of your beneficiaries. In most cases, a simple will is enough to allow the executor of the will to handle the distribution.
Most states set a minimum estate value to be eligible for probate. Under that amount, heirs can claim their share of the estate with a typical, simplified version of probate.
Moreover, estates with individual retirement accounts (IRAs), 401(k) plans, and certain pension plans don’t require probate of the will. In these instances, the plans list the beneficiaries. That way, the assets transfer automatically to the listed beneficiaries without the need for a probate.
However, if your estate has complex administration or your will is complicated with multiple beneficiaries, it might be best to give the executor more legal power through probate.
Identifying Probate Assets
During the probate process, the executor will identify the assets. This means gaining access to bank statements, insurance policies, and other financial documents. Most states require executors to outline the deceased person’s total assets.
The executor also documents physical property that might have value, including art, collections, and vehicles.
Outstanding Debt and Taxes
It is the executor’s responsibility to contact the creditors of the deceased person. The creditors will have a specific time that varies by state in which to make claims on the deceased person’s estate. The executor may choose to accept or challenge these claims. In case of a dispute, the court will resolve the issue.
The executor will have to pay off all outstanding debts before dividing the estate and transfer it to the beneficiaries.
The above also holds true for pending taxes. The executor will have to pay the deceased person’s final taxes from the estate funds within nine months from the deceased person’s death. Estate taxes are different according to state and can be as high as 40% in some states.
Probate Estate vs. Taxable Estate
Probate estate and taxable estate are two different concepts. Most of the assets you own at the time of your death represents your probate estate. However, your estate taxes might include non-probate assets.
For example, life insurance will pass on to your beneficiaries as a non-probate asset. However, the value of the life insurance will count towards your taxable estate amount. So, your estate might have to pay extra for assets assigned through non-probate procedures.
Leaving No Will
When a person dies without leaving a valid will, their estate goes into a condition known as intestacy. When an estate is in intestacy, the court appoints an administrator for the estate. This administrator is not the usual executor, but it can be a member of the family or a close friend.
The administrator is then eligible to apply for the letters of probate, known as letters of administration in this case. With the letters of administration, the administrator will fulfill all financial obligations, and distribute the estate according to the Devolution of Estates Act.
In case there is no eligible administrator, the court may appoint a Public Trustee to administer the estate.
Enjoy Trusted Estate Planning and Elder Care Law Services
Now that you know what it means to probate a will, it is time to plan your estate the right way. Here at Rhodes Law Firm, PC, we are devoted to Elder Care Law and the many estate planning components that it involves. With more than three decades of experience in estate planning and charitable planning, we are a firm you can trust.
We have the experience and the expertise you would expect of someone you trust with your end of life planning. We are here to provide every service you need for lifetime and death time planning.
If you have any questions, please don’t hesitate to contact us online or give us a call during business hours. We will be happy to help you in any way we can!