Almost everyone has heard the term "avoiding probate" when discussing estate planning. Probate is seen as a negative thing, and often this reputation is unearned. Probate itself is not bad and is very likely a necessary part of dealing with the property and debts belonging to the deceased. Thinking that you can avoid it entirely could lead to a regrettable lack of knowledge about this legal practice. To learn more about what makes probate useful and why it should not be feared, read on.
Wills and Probates
Most people naturally associate the presence of a will with probate, but the two are only somewhat related to one another. Whether or not there is a will, most every estate must go through the probate process. In most states, if you have assets or debts that total over a certain amount, the estate must be probated.
Dealing with Debt
Just because someone passes away doesn't put an end to their debt obligations. Probate is the legally indispensable method of dealing with that debt. If you die intestate (or lacking a will), the probate court will be the entity making the decisions about what to do about your debt. Once a will or an estate is filed in court, a notice alerting any potential creditors to come forward is published in a local newspaper. Additionally, the affairs of the deceased are scrutinized to determine the status of any money owed.
If no will is present, the courts will appoint someone to oversee the will, known as the executor or personal representative. Part of overseeing the will includes ensuring that the bills of the estate are paid, particularly any tax debts. It's important for the appointed person to work closely with the attorney, who will designate certain bills to be paid during probate and some to be paid after probate.
Dealing with Assets
Unless you want to leave it to the government (the probate judge) to award your property, you must create some plans to deal with your assets. While a will has always been the gold standard when it comes to dealing with property, there are other methods that could work better. Instead of dealing with your property using a will, you might consider the following:
- Designated your bank accounts (savings, checking, etc) and your investment accounts (401 (k), stocks and bonds, etc) as payable-on-death or transfer-on-death. With this simple document, your assets can pass seamlessly to your designated survivors without having to go through probate.
- A trust can accomplish some of the same things a will can, but without having to go through probate.
- Real estate deeds can be changed to allow the property to pass to another party after the death.
Speak to estate wills attorney services near you for more information and assistance.