What is Probate Court?
Probate court is a section of the court system that transfers beneficiaries or other entities.and property from the deceased to heirs,
How Does Probate Court Work?
John Doe writes a will. In his will, he leaves his house to his sister, Mary, and his car to his son. He leaves nothing to his wife. Then John dies. His wife discovers that John’s will says he does not want her to receive the house or the car. However, the state’s laws state that because she was married to John at the time of his death, she is in fact entitled to those assets. Mary and the son disagree.
The goes to probate court, as do many estates large and small. Many people think they don't need to do any sort of estate planning, and they think that the existence of a simple will does the job. However, are simply legal documents that express the decedent's intentions for burial and to whom he or she wishes to pass and property (the estate) when he or she dies. An actual judge has to allow the transfer of that money and property from the decedent's accounts to the beneficiaries' accounts. This procedure (probate) opens the door for relatives or third parties to contest a will and for a judge to interpret (or misinterpret) John Doe’s wishes, both of which can tie up an estate in court for years.
Why Does Probate Court Matter?
Probate fees can cost thousands and thousands of dollars. There are also executor fees, court fees, recording fees, and attorney fees. In many cases, these fees must be paid as the is probated, meaning that the heirs need to come up with the fairly immediately after a person's death. In many cases, the heirs either have to sell the assets they've inherited just to pay the and fees, or they have to borrow to do so.
Establishing a trust often aids greatly in this situation because it allows a person to transfer legal title of his or her property to another person while they're still alive, potentially saving thousands in probate fees (and taxes). A trust also gives the trustee (the person acting on behalf of the decedent) the authority to distribute assets immediately to the beneficiaries based on the terms of the trust. No court is involved, so there are no probate fees and no public record of the value of the estate. Trusts are not for everyone, however, so it is important to seek proper financial advice.