Probate, meaning the distribution of estate assets following a person’s death, is a public, drawn-out, and administrative legal process.
In this article, we’re going to share the meaning of probate, describe the probate process, and share a few options on how to avoid probate if that’s your goal.
We will also be answering common questions that we receive from our members on the topic of probate and estate planning.
This article is part of our free series on banking, estate planning, and the legal documents that surround them, including a free detailed guide to opening a private bank account for yourself and your family members.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Probate Meaning
- What Is a Probate Court?
- Probate Process
- Frequently Asked Questions
- Do You Want Help Opening Bank Accounts?
Probate Meaning
Probate, meaning the legal process of distributing estate assets after a person has deceased, is a court-mandated estate administration. The probate process involves several key steps, which begin with filing a will and appointing an executor.
The executor is then responsible for notifying each creditor and beneficiary, taking inventory of assets, paying debts and taxes, and then distributing assets to the beneficiaries.
Depending on the jurisdiction, there may be additional factors determining individuals eligible for inheritance, which include if a person dies intestate. Intestate simply refers to when a person dies without a will or having made a valid testament to their wishes.
Intestate follows a logical order of inheritance in accordance with probate law. This starts with spouse and children, followed by family and siblings, and then more distant relatives. In the case of a person passing intestate, the probate court will appoint an administrator.
Trust and Estate Planning
Of course, it’s important to share that there are alternatives to having your estate’s assets distributed through probate. In fact, it’s possible to have your assets avoid probate altogether. That said, this process requires planning and has to be done prior to the passing of the individual.
Two examples of structures that can avoid probate include a revocable trust and an irrevocable trust. A revocable trust allows for avoiding probate, privacy, and ongoing control of the assets by the person contributing them. On the other hand, an irrevocable trust allows for avoiding probate but the assets are then owned and fully controlled by the trustee.
To determine which (if any) estate planning tools are best suited for your situation, you should speak with a qualified estate planning professional.
What Is a Probate Court?
Probate court is a legal court that specifically deals with the process of probate and the distribution of a person’s assets after they die. The court appoints an executor or administrator, depending on whether the deceased has a will or testament, or died intestate. The court then ensures that any outstanding debts and creditors are paid prior to the assets of the estate being distributed to the beneficiaries.
Probate Process
The probate process involves six main steps, which starts with the filing of the will (if it exists) and the appointment of the executor (or administrator). The executor then handles the next four steps, which we have outlined below.
Filing of the Will
Filing of the will or testament with the probate court if one exists.
Appointment of Executor or Administrator
The court then appoints an executor or administrator in order to manage the affairs of the estate and ensure the wishes of the deceased are carried out.
Notifying Creditors & Beneficiaries
The executor then notifies all creditors and beneficiaries of the death.
Inventory of Assets
The executor is then responsible for taking inventory of the assets of the estate.
Payment of Outstanding Debts & Taxes
Any outstanding debts and taxes will then be paid, using the proceeds from the assets of the estate.
Distribution of Assets After a Death
Any remaining assets are then distributed to the beneficiaries of the estate.
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Frequently Asked Questions
Below are a few of the most common questions we receive from people looking into the meaning of probate. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
What Are the Disadvantages of Probate?
There are a number of key disadvantages of probate, which include the length of time it can take to complete, the costs involved with probate (including court fees), the public nature and lack of any privacy, the involvement of the court in the distribution of assets, tax implications for the assets of the estate, and more.
What Are the Advantages of Avoiding Probate?
There are a number of advantages to avoiding probate, including privacy as the assets are never distributed and recorded in public record, speed as assets can be distributed almost immediately, discretion over how the assets are distributed, potential tax savings in the case of irrevocable trusts, and more.
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