What Assets Must Go Through Probate
The death of a close family member is a sad and traumatic event, made even worse by impending legal paperwork. A lot of us aren’t ready to tackle the formalities of death while still grieving.
Documents connected with assets, probate, and the last will and testament can be really complicated, and it takes time to sort them out. However, with a little knowledge in the field, you’ll be able to go through the probate process smoothly and quickly.
Assets left by the deceased person can be divided into two groups: the ones that don’t need to go through probate and the ones that do have to. Below, you’ll find a simple explanation and guide through the whole process.
Terminology - Assets, ProbateIn the terminology of law, an asset is considered to be anything of monetary value that is owned by a person or business.
Probate is the judicial process of validating the will of the deceased and confirming the validity of their testament.
Usually, the assets have to go through probate in order to be legally distributed. However, in some cases, it is not necessary to go through that process in order to manage the assets.
Probate and Non-probate Assets
- Tenant-in-common property
- Beneficiary assets
- Assets that are left out of a trust
Individual assets are those that are assigned only to the deceased person, without any co-owners or beneficiary designations. This group of assets includes, for instance, individual bank accounts, stocks, vehicles, or real estate. Artworks or other valuable items can also be considered individual assets. That’s why it’s advisable to perform home clearance before probate.
Tenant-in-common assets is the property that’s co-owned with one individual or more of them. Each person has a percentage interest in the assets, and it doesn’t have to be proportional, so one person might have 20 percent, and the other - 80. However, only the percentage owned by the deceased is going through probate.
Beneficiary assets are the assets owned by the testament maker, but assigned to a certain beneficiary, most commonly, a family member. Nevertheless, if the beneficiary dies earlier than the person assigning assets, it must go through probate. To get more info about beneficiary assets, click here.
Assets that are left out of a trust are these that are not stated in the testament. That doesn’t mean, however, that won’t be going through the probate process.
What assets do not have to go through probate, then?
Some of the common non-probate assets are, for example, retirement accounts, life insurance plans and objects like household goods or vehicles.
Less valuable objects are automatically passed on to the decedent’s family members. However, the exact procedures may depend on the state law. You may read more about it, here.
Probate Process - More InformationIn order to go through the probate process easily, it’s essential to know it’s structure. Typically, the probate process has got four basic steps:
- Giving notice to the beneficiaries
- Giving notice to all the institutions
- Administering a probate process in court
- Administering the assets by the beneficiaries.
At first, it is necessary to give notice to all the potential beneficiaries, as the probate process needs to be administered in a fully clear and transparent way. All the relatives or people involved need to be aware of the probate process and therefore be able to take part in it.
The next step of the probate process involves noticing all the required institutions, that are, apart from the court, an insurance company or a real estate agency. They also need to be fully informed.
Then, a probate process can be officially administered in court. It usually takes from a few weeks up to several months to finish the process, depending on the number of assets and the beneficiaries. Normally, the process may be accelerated by a competent attorney.
If you want to know more about what a probate process looks like, click here.
Finally, after the probate process is finished, it’s time for the beneficiaries to administer the assets.
However, after doing a little research, it is possible to distinguish between the probate and non-probate assets which will be of help in going through the probate process smoothly.
In case of any doubts, it’s best to consult a reliable lawyer.
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