Probate is the legal process that the courts use to transfer property to your heirs when you pass away. Probate typically
takes six months to two years to complete, assuming that there's no contest over the will. It may also require the service of
a lawyer. Even if you die without a will, your estate must still pass through the
probate system if it exceeds a certain dollar limit. In that case, the court will decide how to distribute your estate
among your relatives.
The typical probate procedure includes the following steps:
- The will is filed with the local probate court (and becomes public record).
- Your family conducts an inventory of your property.
- Your property is appraised.
- All debts, including any death taxes, are paid.
- The court validates the will.
- Court costs, attorney's fees and executor's fees are paid from the estate.
- Then, and only then, is the remainder of the estate distributed to your loved
ones.
Probate is typically an expensive process that can cost between 3% to 7% of the total estate's value. In some states, the fee is set by law. In other
states, attorneys may charge a fixed or hourly fee.
In most states, a certain amount of property can pass through to your heirs outside of the probate process. The exemption ranges from $10,000 in
New Jersey to $100,000 in California. Real estate held in joint tenancy or community property also does not need to go through probate.
A living trust can help avoid probate. This is because your assets are placed
into a trust, so you do not "own" the assets, the trust does. You can
still control the trust assets as if they were your own. When you die, you do not
"own" the trust property, thus, avoiding probate on assets in the trust.
As previously mentioned, you still need a simple will for any property
not included in the trust. As long as all of your significant property is transferred
into the living trust, probating this pour-over will should be a rather simple process.
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