Probate Laws – Wills, Trusts, and Probate Laws
BY MELANIE WALTERS

Probate laws are sometimes wrongly thought to be enacted only if we die without leaving behind a will. There are probate laws however that govern the handling of our estate even if we have a will. These laws also oversee the validation of that will, and any trusts or living trusts we may leave behind. In this article we'll try to cover the basic elements of the probate process and in what way wills and trusts are affected by probate laws.

The Administration of Probate Laws

A simple way to define probate is; it is a means by which the will of a deceased person is validated in order that the property they leave behind can be distributed to their beneficiaries according to their wishes while satisfying legal requirements. Probate laws are designed to enforce that theory, though there are technicalities involved as there is with any legal proceedings. Some of these technicalities may be:

• Notifying Creditors
• Publishing Legal Notices of Death
• Letters of Administration Obtained
• Taxes must be considered
• Objections filed

These are just a handful of what the technical aspects of enforcing probate laws may involve. The laws surrounding estate settlement are complex, and many jurisdictions have their own peculiar rules and procedures. Property is usually dealt with separately, as many countries have laws that pass property automatically to the surviving spouse if the property was owned by a married couple. In cases where children may not agree with this procedure, another separate case may be initiated to deal with the contention. As you see, probate laws can become quite complicated, but they are absolutely necessary.

The Step by Step Enactment of Probate Laws

Probate laws are designed so that a person's estate can quickly, fairly, and accurately be settled upon their death. There is a general procedure that is followed in the United States as such:

1. Property not entered into probate such as that which passes contractually to another person (such as a life insurance policy settlement, or a retirement account or pension that names a beneficiary) are settled separately.
2. Any property held in either a revocable or irrevocable trust that was created during the deceased's lifetime is not susceptible to probate. Any properties held in trust are distributed privately without the intervention of government courts.
3. Once properties not governed by probate laws are set aside or distributed, a probate case is opened and the administrator of the estate collects and inventories the property to be probated. Debts and taxes are paid first, including any state or federal taxes, after which the remaining property is distributed to those named as beneficiaries either in the will, or by probate laws.
4. Time is given to allow anyone to object to the administration of the probate. This can include a contest of the will, a challenge to the qualifications of the administrator, or a challenge to the identities of the beneficiaries. Paternity disputes may also be raised among the inheritors, a situation which requires another separate trial.

Generally probate lasts for several months, and often an entire year will pass and still all property may not have been distributed. This can eat up a lot of the estate in court and other legal costs, the lawyers and state ending up with the majority of the holdings. There is however a way to avoid the distribution of your estate being dictated by probate laws.

Avoiding the Pain of Probate Laws

Executing a living trust is a common way of avoiding the pains of probate laws. Another way is to arrange paid-on-death POD options for your bank accounts, and TOD (Transfer on death) designations for any stock accounts you may have. This way, ownership for those properties is transferred outside of probate. IRAs and 401Ks can be set up to pass automatically to your chosen beneficiaries, or joint tenancies can be set up with a right of survivorship clause. A beneficiary can also be added to the deed of any property, after which the property can be passed on for several generations. You should always calculate the costs of these preventative measures in contrast to the cost of probate, and keep in mind that avoiding probate laws does not eliminate the obligation to pay state taxes.

Many consider probate laws a necessary evil, protecting the estates and inheritors of those who have passed away. As far as avoiding probate laws completely; it can't be done. A happy medium can be reached however if you have a good basic understanding of wills, trusts and probate laws.