The word “probate” might sound intimidating, but understanding it is vital to effective estate planning. When a loved one passes away, their assets might need to undergo a court-supervised process known as probate. This guide will demystify what probate is and detail the types of assets that undergo this process.
What Exactly is Probate?
Probate is the legal procedure by which a deceased person’s assets are identified, evaluated, and distributed to their rightful heirs. This process also involves settling debts and taxes. Probate can be time-consuming and costly, making it vital to know which assets will be subject to it.
Key Types of Probate Assets
1.) Solely Owned Assets: These include any assets held in the deceased’s name alone, such as bank accounts, stocks, bonds, vehicles, and real estate. Personal items like artwork and electronics also fall under this category.
2.) Tenants-In-Common Property: This pertains to ownership where each person owns a defined share, such as 50-50 or 80-20. It commonly applies to real estate among unmarried owners.
3.) Assets With No or Predeceased Beneficiaries: Assets like retirement accounts and life insurance policies may enter probate if there is no named beneficiary or if the beneficiary has predeceased the owner.
4.) Assets Outside of a Trust: Even with a living trust, any property not properly placed in the trust could become part of the probate estate.
5.) Household and Personal Items: Even items with minimal monetary value may need to be probated.
Probate Exclusions
Certain assets are not subject to probate, including properties held with rights of survivorship, assets with named beneficiaries (such as pay-on-death bank accounts), and assets held within a living trust.
Common Probate Concerns
Is probate always necessary?
Not always. Some strategies and legal structures can help avoid probate. Consulting with an estate planning attorney can identify the best approach for your situation.
What’s the difference between probate and taxable estates?
The probate estate involves assets requiring legal processing. In contrast, the taxable estate comprises all owned assets, minus debts, subject to taxation after a specific threshold.
How do you handle probate efficiently?
Hiring an experienced estate planning or elder law attorney can significantly ease the process, ensuring that legal requirements are met and the assets are distributed appropriately. Plus, you can proactively implement a probate avoidance strategy.
Taking Control of Your Estate
Probate doesn’t have to be a daunting process. By knowing what assets are subject to it and how it operates, you can make informed decisions. Here are some actionable steps:
Plan Ahead: Consider creating a living trust or naming beneficiaries where appropriate to bypass probate.
Seek Professional Guidance: An experienced attorney can help tailor an estate plan to your unique situation, potentially saving time and money in the future.
Understand Your Assets: Knowledge of what assets are subject to probate will allow for more effective planning.
Your Pathway to Peace of Mind
Probate is a critical aspect of estate management that often gets overlooked. But with thoughtful planning and professional guidance, it need not be a burdensome process. And as we have suggested, you can avoid it altogether and gain other benefits if you use a living trust as your estate plan centerpiece.
At our firm, we specialize in guiding individuals and families through the estate planning. We understand that each situation is unique and personalized attention is important. S.J. Khalsa is committed to helping you navigate these waters with confidence, compassion, and expertise.
If you are ready to learn more about navigating probate, attend our on-demand webinar. You will learn a lot if you absorb the information that it shares, and this will put you in a good position to request a consultation appointment at our Manhattan, NY estate planning office.
To get your copy, visit our webinar page and follow the simple instructions.
While he was in law school, he worked as an aide to the late John Sparkman, Senior Senator from Alabama. This gave him the opportunity to gain intimate knowledge of the workings of government, and this background has served him well.
He started his private practice in New York in 1974, the first Sikh to be admitted to the bar in the state of New York.And in 1995, when he narrowed his legal focus to the areas of estate planning and elder law, the prestigious American Academy of Estate Planning Attorneys accepted him into their membership.
Special needs planning is an important aspect of the field, and Mr. Khalsa has intertwined his empathy with his expertise to become a leading advocate in this area. Shortly after the Education for All Handicapped Children Act was enacted in 1975, he won the first case in New York that was adjudicated under this law.
S.J. Khalsa has a penchant for philanthropy, and he has raised well over $20 million for charities nationwide. He is a deeply spiritual man who represents the Sikh religion at religious and interfaith gatherings all over the globe.
He believes that successful professionals should contribute to the fabric of their communities, and to this end, he works with law enforcement in New York.
Mr. Khalsa is a graduate of the FBI Citizens Academy program, and he is active in their Alumni Association. He is a member of the FBI/New York Police Department Joint Task Forces on Civil Rights and Hate Crimes, and he sits on the Community Engagement Council that advises the FBI Assistant Director for New York.
He is the author of the highly acclaimed book, Estate Planning Essentials: A Guidebook for Modern Families. Lawyers of Distinction recognized him for his excellence in 2020, naming him a 2020 Power Lawyer, and he is a member of the prestigious American Academy of Estate Planning Attorneys.
Mr. Khalsa lives in Manhattan with his wife, and he has two grown children and four grandchildren. He likes to travel, and he is an avid golfer. As the co-owner of Kundalini Yoga East in New York along with his wife, he instructs practitioners and aspiring yoga teachers.
- Navigating Probate: An Essential Overview - September 11, 2023
- A Letter of Final Instruction Can Complete Your Estate Plan - August 22, 2023
- Everything You Need to Know About Estate Taxes - August 21, 2023
See Larger Map Get Directions