Author: Simon Volkov

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California real estate investor, Simon Volkov, pro

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What is Probate and Can it Be Avoided? By Simon Volkov

  in Family Concerns | Published 2011-09-27 11:36:29 | 156 Reads | Unrated

Summary

What is probate is a common question amongst individuals establishing estate planning and those entitled to inheritance property Probate is required within all 50 states

Full Content

What is probate is a common question amongst individuals establishing estate planning and those entitled to inheritance property. Probate is required within all 50 states. The process is necessary to validate decedent wills, settle estate matters, and distribute inheritance proceeds to designated beneficiaries.

Today, we'll answer what is probate and what steps can be taken to avoid the process. One important consideration is approximately 80-percent of heirs do not receive inheritance held in probate. This often occurs when decedents' outstanding debts outweigh available estate
funds. In addition to paying off debts, probate fees, court costs and administrative fees must be paid before inheritance distribution can occur.

Probate begins when decedents' last will and testament are submitted to the court. If decedents die without executing a will, the estate must still undergo the probate process. Estate administrators are appointed within the will or by a probate judge.

Probate executors are responsible for multiple duties which can range from making funeral arrangements to selling real estate or business assets. Executors receive compensation for their duties based on probate law. Some states require executors to be compensated at an hourly rate, while others use a flat fee or percentage of estate value.

Most personal probate representatives require assistance from a lawyer or estate planner. These services can be prepaid through estate planning or charged to the estate. If legal counsel is not prearranged, the estate executor will be responsible for locating appropriate counsel.

Estate management duties vary depending on the type of assets owned by the decedent. Some decedents include a list of estate assets and property appraisals which simplify estate management. If appraisals are not available, estate administrators must obtain appraisals for valuable assets such as real estate, automobiles, jewelry, antiques or collectables.

Probate administrators are responsible for paying all outstanding debts including mortgage notes, car loans, and credit card expenses. When decedents owned real estate the property usually transfers to the surviving spouse. If no spouse exists, the estate is responsible for maintaining the property throughout the probate process. If the estate is financially incapable of paying real estate related expenses, the administrator can petition the court to obtain authorization to sell inheritance property.

Probated inheritance property cannot be distributed to heirs until debts are paid and the estate is validated as settled through the court. Executors must provide documentation of estate settlement to the probate judge. Upon approval from the court, probate settles and inheritance property can be distributed as outlined in the decedent's last will.

The probate process typically lasts between six and nine months. Much depends on the complexity of the estate and family dynamics. When family strife exists, it tends to magnify during probate. It is not uncommon for disgruntled heirs to contest the Will. This act can prolong probate for several months and potentially bankrupt the estate. Contesting last wills rarely accomplishes anything more than fattening wallets of probate lawyers.

Strategies exist which can avoid probate altogether. Estates valued less than $100,000 can engage in various strategies to protect bank accounts, financial portfolios, real estate holdings, titled property, and life insurance proceeds. Estates valued over $100,000 can avoid probate and inheritance taxes by establishing an irrevocable life insurance trust.

Individuals should consult with professional estate planners or probate lawyers to determine which asset-protection methods are best suited for their needs. Taking time to plan today can prevent family problems in the future. Executing a last will or establishing a trust is one of the best gifts anyone can leave behind.

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About the Author

California real estate investor, Simon Volkov, provides information and resources about Making Home Affordable programs, foreclosure alternatives and how to short sale real estate via his website. Simon's comprehensive real estate article library offers up-to-date information to help borrowers make informed choices. Learn more by visiting www.SimonVolkov.com.