Probate: True or False? There tends to be a lot of confusion about what happens during the probate process. Simply put, probate makes our affairs public when we die, with the court supervising the distribution of our assets to beneficiaries—and ensuring creditors are paid. Legal experts bust some of the misconceptions frequently associated with probate.
With or Without A Will…
Whether or not there is a will, the estate of the deceased goes through the probate process. If there is a will, the executor designated when it was created files it with the court to begin the process. If there is no will, the court will appoint a fiduciary, who is referred to as a personal representative or administrator in most states, and follow the state laws of intestacy to distribute the assets to beneficiaries. As Frank & Kraft explains:
If you do not leave behind a valid Last Will and Testament, the intestate succession laws of your state of residence will determine who gets what after your death. This often means that your spouse will split your possessions with your children. In other states your spouse gets a specific percentage of your total assets. If you want your spouse to inherit everything or want him/her to inherit specific assets, you need to execute a Will.
For the terms of your Will to be effective, your designated Executor must submit your Will to the probate court. The court must accept the Will and declare it to be valid. This may seem like a formality, any “interested person” can contest the validity of Will submitted to probate. Probate can also take months, even years, to conclude, meaning your loved ones may have to wait to receive their intended inheritances. Moreover, the terms of your Will become public record as soon as it is submitted for probate. If you want your estate to avoid probate, including a trust in your estate plan is a good idea.
Although it is legally possible for the state to end up with everything, it is highly unlikely. That only happens if absolutely no family members can be found or if you incurred nursing home costs paid for by Medicaid and the state’s Medicaid Estate Recovery Program aggressively goes after your estate assets. The more likely result is that your close family members will inherit your estate. More distant family members, friends, and charities will receive nothing.
The Flick Law Group reminds us that probate is not “inherently bad,” and notes that under some circumstances, court supervision turns out to be helpful. For example, in situations involving a lot of debt:
The probate process can be extremely valuable…because the court can determine how creditors are paid and how much they receive. Further, because of the structured nature of probate processes, creditors who want to be paid from the estate must submit to the court’s requirements. One requirement is that they make their requests known within a limited time frame. Failure to adhere to the court’s timeline can restrict a creditor’s ability to show up in the future and ask for payment. In most instances, debts not satisfied are lost. As a result, probate may facilitate greater levels of loan forgiveness for an estate.
Understanding and Obtaining Probate Bonds
Probate courts often require the procurement of a type of fiduciary bond, known as a probate bond. Essentially, these bonds protect the interests of the estate and its beneficiaries in accordance with applicable state law. Sometimes these bonds are referred to as administrator, personal representative or executor bonds. Although bond names and requirements vary from state to state, when a probate court anywhere in the country requires a bond, national expert, Colonial Surety is here to help. We are a direct, digital provider of a full portfolio of fiduciary bonds, and make it quick and easy to quote, purchase and e-file them, from anywhere, in minutes—even before leaving court.
Good To Know: Trusts?
Trusts are private and generally do not go through the court process. Though for many of us a last will and testament ensures are affairs and assets are organized for loved ones, there are some family circumstances that make trusts especially useful. For example, a special needs trust ensures that beneficiaries with diminished capacities receive distributions at regular intervals. Trusts can also protect assets, or help families achieve particular goals, such as education.
In addition to making it quick and easy to secure probate bonds such as: administrator, executor, estate fiduciary and personal representative bonds, Colonial Surety is also a direct provider of trustee bonds. The steps to obtaining any of these bonds are easy—get a quote online, fill in the information, and enter a payment method. Print or e-file the bond on the spot. Obtain Bonds Here Now.
Blended families, digital assets, cryptocurrency—chances are that families today are bringing more and more special considerations to estate planning. What’s your advice on the family vacation home? Should a guardianship be set up for children? Although life’s ever more complicated—bonding does not have to be.
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Founded in 1930, Colonial Surety Company is a direct writer of bonds and insurance products. Colonial is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA.