Probate is a legal process where the court overseas the management of a deceased person’s assets or property in order to assure that all debts have been paid and that the assets are transferred to the appropriate parties. Probate administration is the process done in order to prove to a probate court that a will is genuine.
There are some assets which are subject to probate and others which are not subject to probate, making things confusing for many people when it comes to handling their own estate planning or for those handling the estate of a recently deceased loved one.
Probate assets are assets which are held solely in the decedent’s name at the time of their death without co-owners or payable-on-death or beneficiary designations.
Basically, probate is necessary for property in a few main situations:
Individual Assets
When property is an individual asset and is owned solely in the name of the deceased, for example, a real estate holding or a car title that is in that person’s name, but can also include things like bank accounts, investment accounts, stocks, bonds, boats, and even personal property that may not be of great value, whether it is artwork, memorabilia or electronics.
Tenants in Common
When a share of property is owned as “tenants in common,” it means two individuals have a percentage interest in the property, whether it is split 50/50 or 80/20 with another individual. An example of this is if the deceased owned a portion of a warehouse or other property with their brother as an investment.
While real estate is the most common example of tenants in common, there are sometimes other assets which can be titled this way as well, whether bank accounts, investment accounts, or something else.
You should not confuse tenants in common with assets that are held by joint tenants or have arrangements made with rights of survivorship that do not require probate estate.
It is important to note that probate administration comes under the supervision of the court in the place where the person lived at the time of their death, with the exception of real estate. You must probate real estate in the county where the real estate is physically located.
Assets without Beneficiary Designations
In some cases, an estate that has a payable-on-death designation may become part of the probate estate when the named beneficiary dies before the owner. In those cases, or when the deceased failed to name any beneficiaries at all, then those assets will typically divert to probate estate.
Assets Not in a Trust
While sometimes an individual will create a living trust and move their property into it, that does not mean that all of their assets will be free of probate estate at the time of their death.
It is true that living trusts avoid the probate of property held within the trust, but an individual may fail to pass all of their assets into the trust or they may acquire new assets not held by the trust.
Probate and Estate Planning
Estate planning is something that should be managed long before anything happens, or it is ever needed, but it’s also something that many of us put off indefinitely. Life is full of unpleasant surprises and you never know when something unexpected may occur.
From living wills, powers of attorneys, and trusts to the disposition or probate estates, our caring attorneys and staff are here to help you create a plan for the inevitable which will ensure that your loved ones face less of a burden during that time of hardship and anguish. By having a solid plan in place, your family will have less stress to contend with during an already stressful time.
The team at Fears Nachawati are here to support you by helping to craft a plan that will protect your family when they need it most. Contact us today at (866) 705-7584 to schedule your appointment at one of our Texas offices in Houston, Dallas, Austin, Fort Worth, or San Antonio.