Probate is the legal process of administering a person’s estate after death. Probate is exercised in both scenarios where there is a Will or where it’s not.
- If a person dies without a Will, the court will decide how to distribute the person’s estate.
- If a person has a last will, probate will involve proving that the; 1) Will is valid, 2) Executing the instructions as per the Will, and 3) Paying applicable taxes.
Having a written will is one way to make the probate process easier for loved ones. After all, the choice doesn’t only specify who should inherit what; it also designates who should take care of the family members, like children and parents. In addition, it also mentions the name of the executor of the Will. An executor is a person that fulfills the instructions mentioned in a Will.
If you have mindfully prepared an estate plan, you’re smart. Creating a Will or Living Trust makes a challenging life event easier for your loved ones.
What are Probate Assets?
Probate administration applies only to probate assets. Probate assets are those owned in the deceased person’s sole name at death or owned by the deceased person and one or more co-owners and lack a provision for automatic succession of ownership at death. Examples of assets or property that may be probate assets might include:
- A bank account or investment account in the sole name of a deceased person is a probate asset. However, a bank account or investment account owned by the deceased person and payable on death or transferable on death to another or held jointly with rights of survivorship with another may not be a probate asset.
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A probate asset is a life insurance policy, annuity contract, or individual retirement account payable to the deceased person’s estate. A life insurance policy, annuity contract, or individual retirement account payable to a beneficiary may not be a probate asset.
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Real estate titled in the sole name of the deceased person, or the deceased person’s name and another person as tenants, is a probate asset to the deceased person’s interest. However, real estate titled in the name of the deceased person and one or more other persons as joint tenants with rights of survivorship is not a probate asset. Also, property owned by spouses as tenants by the entirety is not a probate asset on the death of the first spouse to die but goes automatically to the surviving spouse.
What has to go through Probate Court?
If you do not have a Will, everything you own will go through probate court. The following will always go through the process, regardless of what your Estate Planning states.
Any Inheritance where the Beneficiary Predeceases the Giver
If a named beneficiary passes away before you do and you fail to update your Will, the courts will get involved in deciding how to settle this part of your estate.
Non-titled Property
Non-titled property is anything you own that doesn’t have paperwork. For example, household items such as appliances, clothing, furniture, and other general items could fall into this category. If your Will names these items and appropriately states your wishes, you can eliminate probate.
Partner-owned Investment Property
In cases where properties are titled as “tenants in common” and precise instructions aren’t present in a Will, a probate court will step in to help determine how your share is passed down. Remember that the process becomes simplified if your Will makes your wishes known.
Sole ownership Property
Property titled solely in your name will go through probate to determine ownership.
What does not have to go through Probate Court?
Certain assets and property will not go through probate. However, proper planning can help avoid probate for any of the following.
Items that have a Beneficiary Named
Naming a Beneficiary on an asset means you can avoid probate. For example, life insurance policies have named beneficiaries, so proceeds go directly to them without going through probate. It may include property and assets such as bank accounts, real estate, retirement accounts, stocks, insurance policies, etc.
Items placed inside a Living Trust
Since a Trust owns the items inside it when you pass away, anything in your Trust can go to your beneficiaries as specified by the Trust, thus avoiding the probate process.
Jointly titled property (with Survivor’s Rights)
Property titled with survivor’s rights will automatically go to a Survivor after you pass. The property does not need to go through probate in this case.
Meaning of Probate in India
In India, probate has been defined under the Indian Succession Act, 1925 as under:
‘Probate’ means the copy of a Will, certified under the seal of a court of competent jurisdiction, with a grant of administration to the estate of the testator.
The person who makes a Will expresses his wishes to be executed after his death by certain persons who are generally named in the Will. The persons so named to execute the Will, are called its executors. A probate is a method through which a Will is certified under the seal of a court. Probate establishes and authenticates the Will. Probate is conclusive proof that the Will was executed validly and is genuine and the deceased’s Last Will.
Probate is compulsory in certain Jurisdictions if a person resides in Mumbai, Chennai, or Kolkata or has property in these jurisdictions. For others, it is not mandatory, but for others also, it is always recommended to go for probate as the title to the assets is more substantial after probate has been obtained.
Probate is issued by the court when a person dies testate, i.e., having made a Will, and the executor or beneficiary applies to the court for grant of probate. On the other hand, if a person has not made a Will, the legal heirs will have to apply to the court for the assistance of a succession certificate which will be given per the applicable laws of inheritance.
Conclusion: Estate Planning Can Make Probate Easier
Probate is the legal process for reviewing the assets of a deceased person and determining who inherits what. In some scenarios, a probate proceeding might not be required but is usually essential when a deceased person dies without a Last Will.
An estate planning that is a part of an overall personal financial planning process considers creating a Will so that the cost and complexities involved in probate can be avoided.
