When someone passes away, estate planning is designed to distribute the remainder of what that person owned. This includes assets, property, and any fund left to heirs or beneficiaries. All of these items must go through the process of probate, which comes with excess fees and taxes under local inheritance laws.
It’s natural to wonder how you can limit those taxes and fees, but it’s impossible to avoid the probate process. So, what can you do to save your family money as well as a legal headache? Learning how to make your estate planning work with the probate process is the answer.
Understanding Probate
Probate is simple the legal process of distributing estate after the death of the state owner. It is designed to uphold your last will and testament in a court of law, settling any disputes. This is also where outstanding taxes are paid and any claims against the estate are taken care of.
Those who write a will before passing away name an executor in the document that will oversee this process. Those who do not will have an administrator appointed by the probate court to carry out the process. That’s why it’s important to sit down a legal representative, like this Anaheim probate attorney, when creating the documents for your estate planning.
How Probate Works
As the process begins, the court will either recognize the authority of the executor you named or appoint your administrator. Either individual will oversee the entire process from start to finish. This individual begins by validating your last will and testament in the courtroom.
Then, they take inventory of all your former property and assets. Each possession on the list is itemized before any beneficiaries or heirs are notified of your passing. The overseer must also notify them that their name is in the will or if they are eligible for inheritance.
Next, outstanding debts and taxes are paid for with your remaining assets. Typically, any funds left in bank accounts are used first. If not, the court can levy part of your estate or assets to make the necessary payments.
Whatever is left after all outstanding debts are paid is then distributed to your named beneficiaries. That includes property, assets, and funds. If someone does not make a will before their passing, the debts are still paid in the same manner and anything remaining must adhere to local intestacy laws.
Estate Planning
So, how does probate go hand in hand with your estate planning? When done properly with the aid of an attorney, your planning ensures that your last wishes are respected. You can even ensure that some of your assets bypass the probate process altogether, usually those that pass to beneficiaries contractually. If you are in the midst of a divorce process, this is also the best time to review
Examples of contractual assets include life insurance benefits, co-owned assets, bank accounts, living trusts, and any property held in a right of survivorship. These and other aspects of planning your estate papers in advance can help your family avoid some of probate’s taxes and fees as well as ensure the legal process doesn’t cause them any more stress in their time of grieving.