What is Probate? When is Estate Probate Needed?
Probate is the process by which your assets pass to your heirs at your death according to the directions in your will.
Also known as estateadministration, the probate process begins when a person completes a Petition for Probate and files it with the Probate Court in the county where the deceased lived. Usually, the person named as the Personal Representative (formerly called the Executor) files this with the assistance of an attorney. The Probate Court will appoint a Personal Representative who will speak for the estate, gather all financial assets, pay all bills and eventually distribute the remaining assets to the beneficiaries named in the will. There is a six-month period after opening the estate for creditors to file claims. After that, the distributions can be made. The Personal Representative will need to file various forms, such as an inventory of the assets, tax returns, the distribution of the assets, and an accounting with the Court.
It is important to know that not all of your assets will pass by your will. Assets that are held in joint ownership with right of survivorship or that have a beneficiary named with the company handling them, such as life insurance policies, IRAs, and pay-or transfer-on-death (POD or TOD) accounts, are examples of assets that do not pass by will. You will want to make sure that the assets that do not pass by will go to the people you want. If you do not have a beneficiary designated on your life insurance policies or your IRA, or the beneficiary has died, that asset will usually be paid to your estate and then distributed according to the terms of your will. If the joint owner of your home or your bank account has died, that asset will also be paid to your estate, and then be distributed according to the terms of your will.
If assets are titled to a trust before you die, those assets also will not need to go through Probate. There are advantages and disadvantages to using trusts and to using wills. For instance, while creditors have only 6 months to make a claim in an estate where a will is probated, they have up to 2 years to make claims against a trust. If the trustee has already distributed the assets in the trust, he could be liable to the creditors. On the other hand, a trust can be easier to amend than a will, offering greater flexibility as you age and circumstances change.
To learn the estate plan that is right for you, call Kentucky ElderLaw, PLLC to set a free consultation.