Many people that are learning about estate planning commonly ask "What is probate?" Here are the basics of probate and how it works.
The term probate refers to the method of distribution of an individual's assets after they die. The estate will be taken before the local probate court and a judge will preside over the distribution of the assets.
Testate vs. Intestate
When the individual that passed away has a will, this is known as testate. The judge is going to then review the will and make sure that it is legitimate. As long as they do not see any problems with the well, they will usually uphold it and distribute the assets according to what the deceased had placed on the will.
If the individual did not have a will when they died, this is known as intestate. In this case, the court is going to appoint someone to handle the estate of the individual. They will collect all of the claims against the estate and use any assets to pay creditors. At that point, the judge is going to refer to personal experience as well as state law and order to determine the best way to distribute the assets of the deceased.
Does all property have to be probated when a person dies?
Not all property has to be probated when an individual dies. There are many different types of assets that can be considered non-probate assets. For example, if you set up a trust, the assets you put into it will avoid the probate process. If you own property jointly with another individual through joint tenancy, the property can pass to the survivor without having to go through probate. You can also set up payable-on-death accounts, which will allow the money in the accounts to pass to the beneficiaries immediately when you die without going through probate.