Probate assets are subject to probate before they are distributed to beneficiaries. While the rules for the distribution of assets seem straightforward, they are quite complex. Probate assets are allocated based on a default beneficiary designation, but the owner can choose who gets them by creating a will. So, if you want to maintain control of the distribution of your assets when you die, understand the probate process. At The Ebbert Law Firm, estate planning attorneys can guide you through this process. They can develop innovative solutions no matter the complexity of your estate planning needs.
What to Know About Probate Asset Distribution
Probate is a legal process of closing out your estate once you pass away. The probate court directs your estate to pay all outstanding debts and taxes during probate. Following the payment of debts and taxes, the court facilitates how the remaining assets are distributed to beneficiaries. Thus, the court determines the parties entitled to the assets of your estate and distributes the assets to them.
As an estate owner, there are strategies you can utilize to reduce the number of assets that will go through probate. Limiting these assets can help you minimize court fees and safeguard your assets from some creditors. Also, you can decrease the tax burden of your estate while maximizing its value.
How to Distribute Probate Assets
If your estate has probate assets, the court should follow some procedures before distributing property to your heirs. Understanding the assets that are subject to the probate process is important to understand this process itself. Moreover, you should know how to turn probate assets into non-probate ones can save your estate money and time.
Generally, all assets you own exclusively should go through probate when you die. However, exceptions apply to this. For instance, a small estate with a value of less than $50, 000 and without real estate does not go through probate. Also, jointly-owned property is not subject to this process. In addition, any asset held in a trust can avoid probate. A skilled lawyer can determine which assets you own go through the probate process. Also, they can help you structure the assets in your estate to avoid the process.
What is the Role of the Probate Court?
During probate, your will be validated by the court. If you do not have a will, the court will disburse your estate’s assets according to the intestate succession laws of the state. Also, the court makes sure your estate notifies all creditors and pays outstanding debts and taxes. After making such payments, the court directs your estate executor to distribute the rest of the assets to your chosen beneficiaries.
Common Problems and Challenges in the Probate Process
During probate, many issues can arise. First, a lot of estates have legitimate debts and taxes that are more than the total value of the estate. In such cases, the estates may end up in the hands of the government or creditors. Thankfully, this can be avoided by working with a reliable estate planning lawyer.
Second, a will can have conflicting provisions that can result in disputes, which prolongs the probate process and leads to higher legal and court fees. Such payments are taken from the estate, reducing the benefit that heirs can receive. Conflicting provisions are especially an issue when you make a will without proper legal guidance.
Lastly, disputes can spring up between interested parties through contested wills, creditor claims, and executor misconduct. If conflicts arise, litigation can consume the resources of your estate and minimize its value. In some instances, negotiation and mediation beyond the court can result in a better outcome for all parties involved.
