Probate is when property is transferred after a person passes away. This legal process has a specific set of requirements in each state. It’s a formal process, and you may need to go to court.
Probate is court-supervised. People don’t always have to go through probate, but many people end up working through the probate process because the person who passed away did not will or pass all assets on to beneficiaries. If there is no recognizable ownership or designation, then the asset is held until the court can determine whom it belongs to.
How can you avoid probate?
The best way to avoid probate is by making sure that you or your loved ones have a will, trust or are with someone with the right of survivorship. When properties belong to two people, the joint owner retains the entire asset after another party’s death if there is no other designation.
What happens if you have to go through the probate process?
If probate is necessary, all property that needs to go through probate is collected for the court. All the debts, taxes and claims made against the estate are then paid. You or your attorney may need to collect all dividends, rights to income and other financial documents. Settling disputes is next followed by distributing remaining property to the court-appointed heirs.
In the majority of cases, an executor is already appointed to take over the affairs of the decedent after death. If one isn’t appointed, the court may determine who should look over the estate and handle the affairs in the meantime. That court-appointed trustee or executor becomes responsible for doling out assets and making sure the estate’s affairs are taken care of.
Finding out your loved one didn’t have an estate plan can shock you. This situation could become complicated, which is why many people turn to professionals for help.
As a single person in New York, you may have never given a single thought towards creating a will. However, most adults should have one. This is especially true if you have children or assets of considerable value. If you die and do not have a will or other estate plan, the state steps in and decides what happens with your assets and your children. This is the last thing you want to happen because it becomes a major headache for your family.
According to Forbes, a will allows you to make a variety of plans for what should happen upon your death. When legal, a will is enforceable and your wishes will be carried out. You can dictate many different things in your will, including who will get what assets, how your debts should be handled and who would get custody of your children.
An important aspect of will creation is choosing an executor. This is the person who will ensure your wishes stated in the will are carried out. This should be someone you trust. It should be someone who will not be easy to manipulate or to get to change what you have written because once you die, the executor has full control and can make decisions on your behalf. You do not have to choose someone you know closely. Your attorney can be your executor if you want. It is just important that you choose a person who will carry out your wishes. This information is intended for education only and not as legal advice.
Many residents in New York who are planning to get married may well have been married before. According to the Pew Research Center, in 2013 both spouses in one out of every five marrying couples were getting married for the second or subsequent time. In four out of every 10 marrying couples, one spouse had previously been married. These realities bring new concerns to the forefront when looking at making a good estate plan.
Concerns involve how to appropriately direct the assets each partner brings to the marriage but also how co-mingled or joint assets may be handled. Forbes explains that a trust may not always be sufficient even thought it can be a valuable tool. Some assets are simply not listed in a trust as they are not titled items, therefore making the use of a will a wise complement to even the best trust.
Another thing people should not overlook is their choice of beneficiary designation for bank accounts, retirement accounts or life insurance policies. These designations will take precedence over any terms in a trust or a will. When choosing a trust, Fidelity Investments indicates that there are some special types of trusts that may be well-suited to blended families. Two examples include the irrevocable life insurance trust and the qualified terminable interest property trust.
Proper estate planning may help remarried couples avoid situations where one partner inherits the others’ assets after the first one dies and then those assets are passed onto only the surviving spouse’s children after that person dies, leaving the children of the spouse who dies first with nothing.
If you have been appointed the executor of your loved one’s estate, you could have many questions when it comes to your responsibilities. As executor, it is vital to avoid any breach of your fiduciary duties, which may lead to serious consequences. For example, a beneficiary could decide to take legal action against you. At Joseph A. Ledwidge, P.C., we can understand how stressful it can feel to be in this position, especially if you are mourning a loved one’s death. However, you can reduce the likelihood of additional hardships by carefully going over your different responsibilities, such as managing the estate’s financial affairs.
As the executor, you may be asked to carry out a financial action that the decedent was able to do before they passed away, such as shutting down a bank account. You may have to close other types of financial accounts as well, such as a credit card account. In some cases, this may not be your responsibility, however, such as an account that was jointly owned by someone else. There are many other financial considerations when it comes to executor responsibilities, such as those involving taxes and debts. Moreover, you may have to face disagreements over the distribution of property and various other issues.
Our firm sympathizes with executors who feel overwhelmed by these responsibilities, especially in the wake of a loved one’s passing. Our section on the obligations of executors and fiduciaries has even more information that is interconnected with this facet of probate law .
Did you know that when you die, your estate does not have to go to probate in New York? While many estates do, it is not required if you ensure everything is in proper order before you pass away. According to The Balance, there are few options you can use to help prevent your estate from having to go through probate .
You can use joint ownership on your accounts and property. Having joint ownership makes things rather simple because upon your death, everything simply and legally transfers to the surviving owner. This occurs naturally for many things if you are married. Most of your property and assets will go immediately to your spouse without concern. There are some drawbacks to joint ownership. The accounts or property are considered the other person’s assets, too, so if he or she gets divorced or files bankruptcy, you could lose them. You also lose control over what happens with the assets after you die, which means you cannot provide for your other heirs.
Another option is a revocable living trust. This gives you more control while also allowing you to provide for your heirs. It covers you while you are alive and after you pass away. You must transfer all titles and assets into the name of the trust, though, to help avoid probate.
Finally, you can designate beneficiaries for your accounts. You may be able to create a deed that also designates a beneficiary for real estate. This information is only intended to educate and should not be interpreted as legal advice.