Monday, July 28, 2008

Understanding Probate

Probate is one of those words that tends to strike a cord of fear in people, however, that does not have to be the case. Through some basic knowledge, the mystery and fear surround the probate process can fall aside, leaving people feeling knowledgeable and empowered.

Blacks Law Dictionary defines probate as the legal process by which the estate of a decedent is administered; generally it involves collecting assets, paying liabilities and taxes, and distributing the remaining property to the heirs. Key points to keep in mind when facing probate are:

  • A will facilitates probate by telling the court how you want your assets and affairs handled upon your death – a will does not avoid probate;
  • Probate applies only to your “probate property” – which is anything you own that does not have a clear designation on it about who should receive it upon your death. Common examples may include your savings account, home, and or car.
  • Probate does not apply to your “non-probate” property – which is anything you own that does have a clear designation on it about who should receive it upon your death – called the beneficiary form or pay on death form or transfer on death form. Common examples include your life insurance and retirement accounts. These assets are passed according to the form, not your will.
  • A fee is assessed by the probate court. In Wisconsin the fee is 0.02 percent of the value of your probate property. Other states fees vary greatly.
  • The person in charge of ushering a decedent’s property through probate is called the Personal Representative.

While probate may take time, and requires a lot of attention to detail and paperwork, it is not unmanageable. And, if you feel it is beyond your comfort level or requires too much of your time, as a persoanl representative you can always hire an attorney to assist you in the process. Generally those fees would be paid with the decedent’s assets, not your own.

1 comment:

Charles J Gervasi said...

Is this statement true?
We should avoid probate on bank accounts by filling out a pay-on-death form from the bank. Efforts to avoid probate on assets that aren't accounts, such as houses, cars, and possessions, are usually not worth the trouble because probate is simply not that bad.