Probate is a legal process used to settle an estate according to the deceased’s will. The taxable portion of the estate is made up of the assets that are not held in a trust. Assets that are jointly owned will also be excluded from probate.
The probate process can be very costly in terms of time and money. However, before the assets can be transferred to the beneficiaries, it is a necessary step. A probate or wills and trusts lawyer Sacramento CA relies on can be of great assistance when you have been chosen by the deceased to settle their estate after their passing.
The Probate Process
When faced with distributing the assets of an estate, it’s important to keep in mind that laws vary from state to state. An estate planning lawyer or probate attorney will be familiar with what laws will pertain to your situation. However, keep these points in mind:
- The probate process becomes part of the public record. One reason why so many choose to create a trust in addition to, or instead of, a will is because assets held in a trust do not go through the probate process which affords more privacy.
- Retirement accounts can be transferred to the appointed beneficiary without going through probate. Talk to an estate planning attorney to find out more.
- Assets that are jointly held do not have to pass through probate.
- When someone passes away without a will, the assets will go through the probate process. Once that is completed, they will be transferred to the heirs.
Assets That Pass Through Probate
Generally speaking, assets that allow a beneficiary to be assigned, such as a retirement account, can skip the probate process. The following types of assets are subject to probate:
• Savings and checking accounts without a transfer-on-death clause that assigns a beneficiary and cash
• Personal property including all valuable items
• Real estate properties
Assets That Can Avoid the Probate Process
Those that are not usually subject to probate include:
• Assets with right of survivorship and joint ownership
• Insurance policy proceeds
• Assets that are held in trusts
• Accounts that allow you to name beneficiaries. Most of them are the real estate properties and cash items.
For those assets that are not subject to probate, the beneficiary can assume ownership sooner and save on the attorney fees and court costs associated with the probate process.
If you are planning your estate, a tax advisor or estate planning attorney can review your portfolio and make recommendations. Advanced planning can minimize the costs your heirs will be subject to, including taxes and attorney fees.
Thanks to our friends and contributors from Yee Law Group for their insight into probate process from inheritances.