What is Probate?
It is the legal procedure of distributing the estate of an individual as per his or her Will, after death. The estate executor designated in the decedent’s Will needs to apply for Grant of Probate for distributing the assets of the deceased legally among the beneficiaries or heirs. This speaks of the relationship between probate and estate planning.
Probate is necessary. It offers recognition to the Will and designates a personal representative or executor. This is for administering the estate as well as distributing the assets among the beneficiaries.
Since the laws in different states vary, it becomes important to get the advice of an attorney when it comes to determining whether or not probate proceedings are required. A lawyer can also advise on whether fiduciaries should be bonded and the reports that need to be prepared.
What is Estate Planning?
Estate planning is the arrangement for the transfer of the estate of an individual after their death. The estate generally consists of all the properties owned at death before they are distributed by intestacy laws or a will or trust.
An estate contains both personal as well as real property. This means all real estate like investment properties and homes along with properties like securities, bank accounts, automobiles, and jewelry make the estate of a person.
Typically, the estate planning procedure requires extensive consultation with different professional advisors, which include financial counselors, life insurance agents, accountants, and, most importantly, lawyers.
Is a Probate Really Necessary?
The majority of the proceedings are neither lengthy nor expensive. Hence it is highly crucial to go through the process. The basic tasks of accounting and administering the assets should happen freely. One should not consider whether an executor is handling the estate or not. Or probate is completely unnecessary as a living trust has got all the assets.
In many states, the procedure has been streamlined and simplified. Hence, the people in these states do not use techniques to avoid the process unless they have valid reasons to avoid the procedure.
During the estate planning procedure, it is more important to minimize the real problems that can make probate challenging than to look out for ways of avoiding probate completely. In other words, individuals should have their focus on minimizing instances where the heirs have filed the lawsuits.
Estate Planning vs. Probate
The people avoiding the estate planning procedure simply because they think they do not possess sufficient assets to probate should give this a second thought. This also goes for the people who think that estate planning is applicable only for those individuals who have several children or a lot of money.
Every individual should come up with a plan for their final affairs. It is not a great idea to leave significant decisions pertaining to an estate to the government. It is necessary for individuals to understand that the majority of the assets they own become properties of “the probate estate.”
All their assets need to pass through probate estate to their beneficiaries or heirs. Nevertheless, certain assets directly pass onto the beneficiaries instead of undergoing probate. By way of the estate planning procedure, individuals can easily reduce the number of assets that need to pass through probate.
Estate planning also helps in ensuring that the assets passing through probate do so as efficiently and as quickly as possible. To be more specific, estate planning is of good help to the loved ones of the deceased when it comes to avoiding the costly and time-consuming probate procedure.
Intestate vs. Estate- The Value of Having a Will
Will is one of the most important estate planning tools. If there’s a will available, an individual can:
- Choose his or her beneficiaries or heirs, including distant relatives, charities, and friends.
- Appoint the estate administrator.
- Set up a testamentary trust for his or her children.
- Appoint a trustee and guardian for the children.
- Make way for the direct distribution of all assets.
- Make their wishes known regarding memorial service, burial arrangement, and funeral.
If an individual possesses a legal and valid will, the probate court duly recognizes the wishes of that person and directs the estate administrator to distribute the assets and take care of the final affairs as per the terms in the deceased’s Will.
Dying intestate means dying without a will. This brings the estate assets to the mercy of the intestate laws dictating the distribution of owned assets.
To conclude, proper estate planning helps in preventing the probate procedure.