Talking about probate and someone’s Last Will and Testament can often seem like a morbid and taboo subject. However, it’s important to know about these matters so that you and your family can be as prepared as possible when dealing with an estate.
So what is probate? And how does it affect an estate and the estate’s beneficiaries? Keep on reading and we’ll take you through everything you need to know!
What Is Probate?
Probate is the process of authenticating the last will and testament if the deceased made one. It includes locating and determining the value of the person’s assets as well as paying their final taxes and bills. Also, the remainder of the estate is distributed to the proper beneficiaries.
The probate process is supervised by a court.
When Is the Probate Process Required?
There are specific laws in every state that determine what’s required to probate an estate. You can find these laws in the estate’s “probate codes.”
In Wisconsin, any estate that’s valued at more than $50,000 will have to go through the probate process. The probate process can sometimes be avoided if the estate is subject to certain exemptions.
Some of these exemptions include life insurance proceeds, assets that are titled jointly with another individual, and any retirement fund where a beneficiary was chosen. Also, assets that are placed in a revocable living trust don’t have to go through the probate process.
If there isn’t a will, then the probate process will still be needed to pay the final bills of the deceased and to distribute their estate. The steps that are involved tend to be similar, whether or not there’s a will.
Appointing the Personal Representative
A personal representative of the estate will be appointed by a judge. This personal representative is also sometimes called an administrator or an executor . This person will oversee the probate process and they will settle the estate.
Usually, the decedent will include their choice for the personal representative in their will. If they don’t appoint someone in their will, then the court will usually choose the next of kin. This tends to be the surviving spouse or an adult child.
The individual isn’t obligated to serve as the personal representative and they can decline the position.
The appointed personal representative will be given documentation that allows them to enter into transactions on the estate’s behalf. This documentation is referred to as “domiciliary letters.”
Identifying and Notifying Creditors
The creditors of the deceased will have to be identified. They will then need to be notified of the death.
Because it may not be possible for the personal representative to know about all of the creditors of the deceased, they will have to post a notification of the death in a local newspaper. In this notification, they will have to include the name, birth date, and death date of the deceased.
The personal representative will also need to include the name of the county where the probate estate is being opened and the deadline for filing any creditor claims.
The personal representative has the ability to object to claims made by a creditor if they believe that the claim isn’t valid. The creditor can then petition the court and have the probate judge determine if the claim needs to be paid.
Valid claims made by creditors will have to be paid. The personal representative will use funds from the estate to pay off all of the final bills and debts that the deceased left behind. This includes bills that might have been incurred during the final illness.
Distributing the Estate
When all of the steps in the probate process have been completed, the personal representative will then be able to petition the court for permission to distribute what’s left of the decedent’s assets. These assets will be given to the beneficiaries who are named in the will.
This may require permission from the court. The personal representative may only distribute after they have prepared a full accounting of every financial transaction that they’ve undertaken throughout the probate process.
The personal representative needs to list and explain every expense that was paid and all of the income that was earned by the estate. Forms can be provided to the personal representative in order to make this process a bit easier.
If the will lists minors as beneficiaries, the personal representative also might be in charge of setting up a trust to take possession of these bequests. This is because minors aren’t able to own their own property.
Sometimes, with adult beneficiaries, deeds and other similar documents have to be drawn up and filed with appropriate state officials in order to finalize the bequests.
“Intestate” Estates
An intestate estate is an estate where the deceased didn’t leave behind a valid will. This is either because their will wasn’t considered to be valid by the probate court or because one was never created.
The main difference is that because there is no valid will, the decedent’s last wishes can’t be obliged. The estate will then have to pass to the closest relatives in an order determined by the law.
The Importance of Knowing About the Probate Process
Hopefully, after reading the above article, you now have the answer to the question – “what is probate?” By knowing what probate is and how it works, you’ll be able to prepare your estate or the estate of a loved one.
Are you looking for legal guidance with estate planning? Contact us today and see how we can help you!