Investopedia’s recent article, “What Is Probate Court?” explains that people want to avoid or shorten the probate process because of its length and expense. This can be accomplished by creating a living trust, assigning your assets to it and naming beneficiaries for those assets. A living trust is an estate planning tool that can help you avoid probate’s usually lengthy, sometimes costly, and always public nature.
Some assets, including life insurance and retirement accounts, are not generally subject to probate. You instead designate beneficiaries for them in the account paperwork held by the life insurance company, retirement plan, brokerage, and bank. As a result, these funds will flow directly to the beneficiaries upon your death.
Another way to reduce probate is to give gifts during your lifetime. Anyone can provide individuals with tax-free money in the form of gifts, as defined by the IRS.
At a probate court hearing, the judge will list the responsibilities of the executor of the will, including contacting any beneficiaries and creditors, appraising the deceased’s assets and paying any outstanding creditors and taxes.
At the second court hearing, the judge will ensure that all these tasks have been accomplished and close out the estate, so that the transfers of money and other assets in the estate may start.
Each state has specific probate laws to determine what’s required. Unless someone has no assets or descendants when they die, probate may still be necessary to settle the deceased’s remaining affairs, including debts, assets and paying their final bills and taxes.
While it can be hard to avoid probate court altogether, some ways to avoid probate include creating a living trust, naming beneficiaries clearly on all investment, bank and retirement accounts, and establishing joint ownership for certain assets.
The time for probate varies depending on the deceased person’s assets, the complexity of their will and other factors. For instance, the executor may have to liquidate assets to pay creditors, and selling a home or other property for this purpose can take time. However, the average time it takes to complete is about nine months.
After someone dies, the grief over their loss can be all-consuming for their family and friends. Unfortunately, the probate process can add to this a financial and administrative burden. Yet, with or without a will, the probate process is essential to ensure that all of one’s affairs are in order before death.
Contact us to review your estate plan with one of our experienced estate planning attorneys.
Reference: Investopedia (Sep. 21, 2022) “What Is Probate Court?”
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