Having a well thought out estate plan in place is crucial to protecting your, your assets, and your loved ones both now and in the future. If you are new to estate planning, the entire concept may be a bit intimidating at first given how much there is to learn and the sheer number of decisions that need to be made. Your California estate planning attorney can help ensure that you make the right decisions for you and your loved ones within your plan; however, it may also be helpful for you to learn a little more about some of the more common estate planning concepts as well. For example, the following are five things everyone should know about wills and probate:
- The presence, or absence, of a Last Will and Testament determines much regarding the probate of an estate. When a decedent leaves behind a valid Last Will and Testament, the decedent is said to have died “testate.” If a decedent dies without a valid Will in place, the decedent is said to have died “intestate.” The differences between a testate and an intestate estate are many; however, the most obvious is found in who decides how estate assets are distributed after the decedent’s death. If a Will was left behind, the terms of the Will are used to decide what happens to estate assets. When no Will was executed by the decedent prior to death, the California laws of intestate succession are used to decide who will receive the estate assets.
- There are different types of probate. Most estates are required to go through formal probate; however, not all estate are required to do so. The majority of states, including California, offer alternatives to formal probate for small estates. The eligibility criteria for using a small estate alternative will differ from state to state; however, in most cases the value of the estate will have to fall below a specific limit. Some states also prohibit estates that include real property from using a small estate alternative. If a small estate alternative is an option, it will considerably shorten the time it takes the estate to get through probate.
- Not all assets are required to go through probate. One of the first things that must happen after the death of an individual is to identify and locate all estate assets. Next, the Executor or Personal Representative must decide which of those assets are probate assets and which are non-probate assets because some assets can bypass the probate process and pass directly to the designated beneficiary. Some common non-probate assets include:
- Trust assets
- Life insurance proceeds
- Certain types of jointly held property
- Assets held in a “Payable on Death (POD)” or a Transfer on Death (TOD)
- Formal probate can take a long time to conclude. Even a relatively modest estate can take a considerable amount of time to get through the probate process. One reason for this is that all states give creditors of the estate a specific period of time within which they must file a claims against the estate. The time period varies from state to state; however, most states give creditors at least three months.
- A Will can be challenged. If a beneficiary or heir of an estate believes that the Last Will and Testament presented to the court is not valid, a Will contest may be initiated. This will effectively bring the probate process to a halt while the Will contest is litigated. If the contestant is successful, the Will is declared invalid. The court then looks for another valid Will to use to probate the estate. If no other Will exists, the state intestate succession laws will be used to probate the estate. If the Will contest is not a success, the probate process will resume using the original Will.
The best way to ensure that you understand everything you need to know about Wills and probate is to consult with an experienced estate planning attorney when you are ready to create your estate plan.
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