Money Advice: What You Should Know About Probates

You should have a will in place before you die. If you have no will, it will cause your estate to go into probate. This process can be lengthy and costly to your family.

When you die, your estate goes into probate. The probate process helps transfer your estate in an orderly manner. How quickly the process is completed depends on whether or not you had a will in place at the time of your death. Knowing more about the probate process will help you get your affairs in order, so that your assets can be transferred in a more organized manner.

If you have a will in place when you die, your will determines how your estate will be transferred during probate. When there is no will in place, or only part of your estate is covered by a will, the laws where you live will decide how your estate is divided. To avoid any confusion or hard feelings within your family, a will should be drawn up. When your estate is not properly planned, the probate process can drag on for years. The probate process can also drag on for years if the estate is substantial or if the proceedings are adversarial in nature. The length and complexity of the procedure can be costly to the value of your estate. This can cause a financial burden on your family.

In your will, you will need to name an executor. An executor finds, secures, and manages your assets during the probate process. The executor will need to file a document with the probate court. This petition actually starts the probate process. If a will is in place, the probate court will admit your will, basically acknowledging its validity. Depending on what state you live in, your executor may be required to publish a death notice. This notice makes your estate part of public records. Some see this as a disadvantage. They see no reason why the public needs to review the matters of your private estate.

Your executor will need to inventory your estate. One reason for this is the executor needs to make sure you left enough to cover any outstanding debts. Also, this allows the executor to make sure everything is present and accounted for.

Once everything has been inventoried and all of the snags (if any) have been taken care of, your estate can be distributed. If you have a will in place, your estate will be distributed according to your wishes. If no will was left, the state will divide your estate up as they see fit. Creditors who have valid claims are paid in a certain order depending on the state you live in. Usually the estate administration costs are paid first. Allowances, funeral expenses, taxes, family, and all remaining claims usually follow these costs. Anything that is left is distributed to your heirs or beneficiaries you have named in your will.

In many cases, probate should be avoided. It rarely benefits the beneficiaries, and it costs money and time. The only time probate proceedings make sense is when there are complicated problems with the estate. Depending on your circumstances, you might want to adopt a plan that would eliminate the need for probate. If you are older and in poor health, or have few creditors and your property falls under your state's probate exemption, you should try to avoid going through probate proceedings.

Whether or not your estate has to go through probate proceedings depends on how well you prepared your estate before you died. The best way to be prepared is to understand the probate process, examine your financial situation, and draw up a will. This will allow you to make an informed decision on whether you should prepare your estate plan for probate, or should you try to avoid the probate process. This would save time and money that you had set aside for your heirs.

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