Some people assume that the executor of an estate can distribute assets to the people that are named as inheritors shortly after the passing of the testator. In fact, the executor must admit the will to probate, and a court provides supervision during the administration phase.
The Purpose of Probate
Why is this process necessary? If the executor can distribute assets to the beneficiaries right away, creditors of the decedent would have no opportunity to seek payment. This would not be fair, and this is one of the reasons why probate exists.
A notice is posted for creditors, and they are given time to come forward seeking payment. Another purpose of probate is the validation of the will. The court will make sure that it has been properly executed, and if anyone wants to contest the will, they can come forward.
The executor will identify and inventory the assets that will eventually be passed along to the beneficiaries. In some cases, appraisals and liquidation of property will be necessary.
When all these tasks have been completed to the court’s satisfaction, the estate will be closed, and the assets will be distributed. The process will typically take six months to a year, and complicated cases can be bogged down in probate for longer periods of time.
This waiting game is one of the drawbacks of probate, and there are expenses that reduce the inheritances that will be received by the heirs. It is a public legal proceeding, and anyone that has an interest can access the records, so there is a loss of privacy.
Simplified Probate Procedure
Most states have probate shortcuts for small estates, and Tennessee is in this category. If the estate is worth $50,000 or less excluding real property and property held in joint tenancy, the court may approve a simplified process.
To take advantage of this option, the executor will draw up an affidavit with the original will attached and submit it to the probate court. The document must list the decedent’s assets and debts, and there are some other details that must be included.
There are estate planning strategies that can be used to completely avoid probate, and a living trust is the most commonly utilized solution. If you create a living trust, you can act as the trustee while you are alive, and you would be able to revoke the trust if you choose to do so.
You would have complete access to the resources that you have technically signed over to the trust. When you are drawing up the trust declaration, you would name a trustee to succeed you after your passing, and you designate beneficiaries.
When the time comes, the trustee that you empowered would administer the trust. The assets will be distributed to the beneficiaries in accordance with your wishes, the probate court would not be involved.
Some types of transfers are not subject to probate. Life insurance proceeds are transferred to the beneficiary outside of probate, and this applies to individual retirement account beneficiaries as well.
A payable on death account is a bank or a brokerage account with a beneficiary, and the transfer from the original account holder to a beneficiary would not go through probate. Property held in joint tenancy will pass to the surviving joint tenant in a probate-free manner.
Schedule a Consultation Today!
As you can see, there are some procedural realities that you should be aware of when you are devising your estate plan. You should keep an understanding of your options so you can make fully informed decisions, and we would be more than glad to help.
A living trust is the ideal estate planning centerpiece for a wide range of people, but there are other possibilities. When you work with our firm, we will gain an understanding of your family dynamic, your financial situation, and your legacy goals.
We will make recommendations based on the circumstances, and at the end of the process, you will go forward with a custom crafted plan that is ideal for you and your family.
If you are ready to get started, schedule a consultation today by calling us at 901-763-2500 or 866-997-6325. There is also a contact form on this site you can use if you would rather send us a message.