Probate is the process of passing title to property from the deceased person to his or her beneficiaries’ or creditors. Probate, Latin for ‘to prove’ involves proving the validity of a will (if there is one) and protecting the beneficiaries and creditors of the deceased. Some people mistakenly believe that probate is avoided through the use of a will. In fact, anything distributed by will is required to go through the probate process.
Property that has a beneficiary designation (and where the beneficiary is surviving and of legal age and sound mind to take ownership of the property) will not be probated. Those assets will be distributed to the surviving joint tenants, to the named beneficiaries, or according to the terms of whatever document made the asset a non-probate asset. For example, life insurance, individual retirement accounts, pension plans, annuities and accounts with a P.O.D. (pay on death) designation may avoid probate using beneficiary designations. However, if a joint tenant or beneficiary is listed but the beneficiary or joint tenant does not survive, then that asset will be an asset that has to go through probate. Any property held in trust will be non-probate property.
To protect beneficiaries and creditors, the probate process has requirements including written notice to creditors with waiting periods during which time creditors can file claims, written notice to everyone named in the will and everyone who would inherit if the will was found to be invalid. The national average time to complete the probate process is approximately 16 months. Also, probate fees are involved. In California, probate fees are set by statute, starting at four percent (4%) on the first $100,000, three percent (3%) of the next $100,000, two percent (2%) of the next $800,000 and one percent (1%) of the next $9 million.
Between the probate fees and the delay caused by the waiting periods, many people try to avoid the probate process entirely.
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