Many individuals use wills to control the distribution of their estate after their passing. This makes the will a big part of the probate process for many estates.
For individuals forming estate plans and beneficiaries, it is helpful to understand this process. In regards to probate, there are a few important aspects to be aware of.
Probate
Probate is aimed at ensuring the proper distribution of an estate. It comprises a few different processes, including:
- Paying off estate taxes
- Settling any outstanding financial debts
- Distributing assets to beneficiaries
The court generally oversees this process (though there can be some options for non-supervised proceedings). However, the job of the personal representative is to orchestrate and complete these processes correctly. For this reason, it is critical for individuals to carefully consider who to choose for this title and task.
Will
Typically, the personal representative must settle all taxes and debts before distributing the rest of the estate. A will can set which parties the remainder of the estate assets will be distributed to. Therefore, it is not only can be very important to have a will, but to also make sure it is valid in accordance with state law.
Exemptions
There are certain assets, and even full estates, that can be exempt from the probate process. Common assets that receive exemptions include the following:
- Certain properties with joint ownership
- Life insurance and retirement benefits
- Trust assets
These assets typically go straight to the party designated rather than getting transferred through the probate process. However, it is important to understand that, depending on what the asset is, it may still be susceptible to taxes. Understanding what assets are exempt can be important for individuals engaged in estate planning and for families involved in the probate process.
These are just a few key aspects of the complex probate process. For those who are estate planning or are going through probate or may be soon, it may be beneficial to learn about and get guidance on the probate law of the area the estate is in.