Probate
In general, probate is the legal process for making sure that the property of a deceased person (the decedent) is collected and preserved; the decedent’s debts and taxes are paid; and the remaining property is distributed to the beneficiaries designated in the decedent’s last will or, if the decedent died without a valid will, to the decedent’s lawful heirs. The person who does this is called the personal representative, sometimes known as the executor or administrator.
If a person dies without a Will (”intestate”), the probate court appoints a person to receive all claims against the estate, pay creditors and then distribute all remaining property in accordance with the laws of the state. The major difference between dying testate and dying intestate is that an intestate estate is distributed to beneficiaries in accordance with the distribution plan established by state law; a testate estate (after payment of debts, taxes and costs of administration) is distributed in accordance with the instructions provided by the decedent in his/her Will.
Even if a person dies with a will, a court generally must allow others the opportunity to contest the will. Creditors are allowed to step forward; the validity of the will can be scrutinized; and the deceased’s mental capacity at the time the will was drafted can be questioned. These proceedings take time and money, and your heirs are the ones who will have to pay. Since probate proceedings can take up to a year or two, the assets are typically “frozen” until the courts decide on the distribution of the property. The entire process is made public for everyone to see your financial and personal matters, and the attorney fees can add up: appraisal costs, executor’s fees, court fees, legal and accounting fees, and surety bonds. Probate can easily cost from 3% to 7% or more of the total estate value.
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