WHAT IS PROBATE?

When a person dies with real or personal property in their sole name, Probate is the only way to transfer said property. Probate may be necessary for property solely owned by the deceased and not necessary for other property. Probate is avoided by how the property title is held at the time of death.

If the property is held in joint names with rights of survivorship, then the survivor owns the property on the death of the first. That property is not "solely owned" by the deceased. However, if the property is held as "tenants in common" by two or more people, this ownership creates a solely-owned interest of the deceased. Example: A and B hold property as tenants in common. Before any death, A and B each own an undivided one-half interest. On A's death, his one-half interest is solely owned property and B continues to own its one-half interest. Property owned by a deceased tenant in common must be probated.

No Probate is required for property of the deceased held by their Grantor Revocable Trust. A Grantor Revocable Trust could be created by "A" conveying the property to "A" as Trustee of A's Trust and making "A" the sole beneficiary during his/her lifetime. Giving a Deed for real property to the Trustee would avoid Probate of said property. The Trust would specify on A's death who would be the successor Trustee and who would receive the property.

Your Will or the State Statutes (if no Will) determine who receives the property in a Probate. The Probate is handled by a Personal Representative, sometimes called an "Executor" or "Administrator" who is named in the Will or by the Court. A Personal Representative must obtain an insurance bond which can be costly. The Will may provide the Personal Representative need not provide a bond.

A Probate takes approximately six to eight months to complete, and can take longer in complex estates. Some states may be quicker; some longer.

Disclaimer: This web page is designed to help you know when to ask a question and what questions to ask. Tax laws are very "fact" specific. What would be a good tax savings plan for one person may not be good or proper for another person. Do not attempt to follow any of the above without discussing it with your Tax Advisor. Any federal tax reference contained in this communication, including attachments and enclosures, is not intended or written to be used and may not be used, for the purpose of (i) avoiding tax related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party, any tax related matters addressed herein.