When you are planning your estate, you should understand the estate administration process that will commence after your passing. This will sometimes involve probate, and we will provide some important facts about this process in this post.
Most people are aware of the fact that an executor is the person that will eventually distribute inheritances when a will is used as an asset transfer vehicle. The executor is not allowed to administer the estate without any type of government supervision.
A will would be admitted to probate, and the probate court would supervise while the executor is handling the estate administration tasks.
It would not be fair for the inheritors to receive their bequests before debts have been paid, so creditors are notified, and they have a chance to seek payment. The executor will also pay final taxes while the estate is being probated.
In order to do this, an estate bank account must be established, and the executor will obtain an Employer Identification Number that will give them the ability to set up the account.
The court will determine the validity of the will, and if anyone wants to present a challenge, they would have that opportunity during probate.
When all the necessary tasks have been completed to the court’s satisfaction, the estate will be closed, and the inheritors will receive their bequests.
This court will also provide supervision when someone passes away without any estate planning documents at all. They would designate a personal representative to assume the same role as an executor.
At the end of the process, the intestate succession laws would be used to distribute assets to the closest relative or relatives.
Why Avoid Probate?
There are essentially three reasons why people choose to avoid probate when they understand what it entails. One of them is the fact that they want to maintain their privacy, and probate records can be accessed by anyone that goes through the necessary steps to obtain them.
You probably do not want a lot of money to be lost during the estate administration process. Probate expenses include the executor’s remuneration, possible legal and accounting fees, court costs, appraisal and liquidation charges, and incidentals.
The time consumption is the third reason why probate is not very appealing to many people. It will take about nine months at minimum in most cases, and the inheritors have to wait it out before they can receive distributions.
There are a handful of types of asset transfers that do not go through probate. Life insurance proceeds are transferred to the beneficiaries outside of probate, and this would also apply to the beneficiary of an individual retirement account.
A payable on death account is an account with a beneficiary that can be opened at banks and brokerages. The transfer to the beneficiary after the death of the original account holder would not be subject to probate.
Joint tenancy is the condition of joint ownership. If you own property and you make someone a joint tenant, they would own half of the property. If you predecease them, they would inherit your share of the property outside of probate.
Revocable Living Trust
A revocable living trust is the widely embraced probate avoidance tool. You would act as the trustee while you are living if you establish this type of trust, and you would name a successor to assume the role after your death.
They would be able to distribute assets to the beneficiaries with no probate court involvement. This is just one of many benefits that living trusts provide, and we will explain the others in a future post.
Take Action Today!
We are here to help if you are ready to work with a Glastonbury, CT estate planning lawyer to put a plan in place. You can send us a message to request a consultation appointment, and we can be reached by phone at 860-548-1000.