Within the estate planning process, legal terms can be confusing. One such term, probate, is a simple term, but plays an important role in planning for the future of your estate.
Dictionary.com defines “probate” as the following:
“The legal process in which a Will is reviewed to determine whether it is valid and authentic. Probate also refers to the general administering of a deceased person's Will or the estate of a deceased person without a Will. The court appoints either an executor named in the Will(or an administrator if there is no Will) to administer the process of collecting the assets of the deceased person, paying any liabilities remaining on the person's estate and finally distributing the assets of the estate to beneficiaries named in the Will or determined as such by the executor.”
Probate is simply the proving of a person's will for the distribution of assets, done by a probate court. Probate comes from the Latin word probatum meaning “a thing proved”.
The probate process contains a few simple concepts:
1. The deceased person's Will is taken to probate court and proven valid;
2. The executor of the Will then will settle any outstanding debts the deceased person may have accrued;
3. Next, the executor of the Will distributes the deceased person's assets to the beneficiaries; and
4. The probate court overseas the administration of the Will by the executor and protects the interest of the beneficiaries.
(It is this last point that drives people to want to avoid probate in California. The court process is so rigid, and has so many mind numbing procedural rules that it takes 12 to 18 months to complete the process at great expense.)
If a person passes away without designating an executor in a Will, one will be appointed to the estate in probate court. A few people purposefully decide not to appoint an executor and leave that process to the courts, but this is rarely the best method of estate planning.
One drawback of the probate process is that every detail of the Will and estate is public record. The value of the estate, lawyer and estate manager's fees, and the overall condition of the estate is put on record in probate court. Due to mandatory fees, probate can become quite costly, especially compared to the cost of creating a trust to avoid probate.
The best way to prepare for the future is to establish a Will, or better yet, a trust. Such documents can provide an executor specific direction in how to distribute an estate. While it might be the choice of some people to opt out of a trust and allow the probate process to handle estate distribution, this decision should be taken only in rare circumstances. Creating a trust is always the preferred option for many reasons, not the least of which is avoiding the probate process.
Probate can be a time-consuming and confusing process for the person without a Will, but through careful planning and the creation of a good Will, you can remove some of the painstaking processes involved in probating an estate.
If you would like more information concerning probate or other estate planning options, www.EstatePlanningSpecialists.com is a comprehensive online resource for personal wealth management solutions through wills and revocable trusts. Whether your estate planning goals are immediate or long-term, a California certified estate planning specialist will be able to counsel you on the best options available to you to meet your individual needs.