When someone dies, you might think that the hardest part (besides grieving) is organizing any funerary or memorial events. While the ceremonial aspects of honoring a death can take their mental, emotional and financial toll, we often donʻt realize the next set of gears that go into motion: probate court.
Probate is the process through which a deceased individualʻs assets and debts are accounted for, distributed and settled. The court works with the executor or administrator to review any wills or other relevant documentation. They analyze the values of assets including real estate, antiques and accounts. Probate dispurses payment to creditors first and then distributes remaining assets to beneficiaries according to the wishes of the deceased.
What can slow the probate process
A lack of a will or a will whose legality is difficult to determine will draw out the timeline of probating the estate. A higher total value of the assets will also lengthen the probate process. The reverse can be true when the deceased person’s debt is greater than their aggregate assets. In some instances with high debt and low assets, an alternative method for settling the estate may be available.
Exceptions to probate
There are circumstances in which you can avoid probate. These exceptions usually include contractual agreements in which there is a beneficiary designation. Examples of these include:
- Life insurance plans
- Pensions and 401k plans
- Medical savings accounts
- Individual retirement accounts (IRA) with assigned beneficiaries
- Jointly owned assets with a right of survivorship
Dealing with probate can be stressful, expensive and long-lasting. With all the other challenges you will likely face after losing a loved one, sorting out their financial affairs doesn’t have to be one of them. It may be supportive to reach out to someone familiar with probate administration to guide you along in the process.