What you need to know about probate
Someone close to you has died and left behind assets and property that need to be given to their beneficiaries. During this difficult and emotional time, understanding the probate process is very important for settling the estate of the person who died.
Probate is the legal process by which the assets of a person who has died are distributed and their last affairs are taken care of while the court watches. While probate can seem daunting, understanding this can help you navigate this process with confidence and clarity. This article explores what you need to know about probate and how it impacts the distribution of an estate.
Probate process overview
1. Filing the petition for probate
The probate process starts with filing a petition in court to initiate the probate proceedings. This petition typically includes details about the deceased person, their will (if they had one), and information about their assets and beneficiaries. Filing the petition officially begins the legal process of administering the estate.
2. Appointment of executor
Once the petition is filed, the court appoints an executor or personal representative to oversee the probate process. The executor is in charge of the estate of the person who has died. This includes finding assets, paying off debts and taxes, and giving assets to beneficiaries based on the will or state laws if there is not a will.
3. Inventory and appraisal of assets
After being appointed, the executor gathers and inventories all the assets owned by the deceased person. This includes real estate, bank accounts, investments, personal property, and any other belongings. An appraisal may be required to determine the value of certain assets, such as real estate or valuable collectibles.
4. Payment of debts and taxes
The executor is responsible for identifying and paying the deceased person’s debts and taxes using funds from the estate. This may include outstanding bills, loans, funeral expenses, and any estate taxes owed to the government. Debts and taxes must be settled before assets can be distributed to beneficiaries.
5. Distribution of assets to beneficiaries
Once debts and taxes are paid, the executor distributes the remaining assets to the beneficiaries according to the terms of the will or state laws of intestacy if there’s no will. Beneficiaries may receive assets outright or in trust, depending on the instructions outlined in the will.
6. Closing the estate
Once all debts are paid, taxes settled, and assets distributed, the executor files a final account with the court detailing all transactions and activities related to the estate. After the court approves the final account and confirms that all requirements have been met, the estate is officially closed, and the probate process concludes.
Types of assets subject to probate
Real property
Real property refers to land and anything attached to it, such as houses, buildings, or land improvements. When a person who owns real property passes away, it may be subject to probate if it’s not transferred through other means like joint ownership or a living trust.
Probate ensures that ownership of the real property is transferred to the rightful heirs or beneficiaries according to the deceased person’s will or state laws if there’s no will.
Personal property
Personal property includes movable assets that aren’t attached to land or real estate. This category can encompass a wide range of items, such as furniture, jewelry, vehicles, electronics, and household belongings.
Like real property, personal property may be subject to probate if it’s not distributed through other estate planning methods. Probate ensures that personal property is inventoried, valued, and distributed to the appropriate beneficiaries.
Bank accounts
Bank accounts, including checking accounts, savings accounts, and certificates of deposit (CDs), are often subject to probate if they’re solely in the deceased person’s name without a designated beneficiary. During probate, the executor gathers information about the bank accounts, pays any outstanding debts or taxes, and distributes the remaining funds to the beneficiaries according to the will or state laws.
Investment accounts
Investment accounts, such as stocks, bonds, mutual funds, and brokerage accounts, may also be subject to probate if they’re solely owned by the deceased person. Like bank accounts, the executor manages these investment accounts during probate, liquidates assets if necessary, and distributes the proceeds to the beneficiaries.
Retirement accounts
Retirement accounts, such as 401(k)s, IRAs, and pensions, are generally not subject to probate if they have designated beneficiaries. When a person passes away, the funds in these accounts are transferred directly to the designated beneficiaries without going through probate.
However, if there’s no designated beneficiary or the designated beneficiary predeceases the account owner, the retirement account may become subject to probate.
Seek professional advice for estate planning and probate matters
Whether you’re planning your estate or dealing with probate matters, consulting experts can provide invaluable support and peace of mind. For assistance with selling a house in probate or any other estate-related concerns, consider reaching out to Sell a House in Probate.
Let their expertise guide you through the complexities of estate planning and probate, ensuring a smooth and efficient process from start to finish.