Submitted by admin on Fri, 08/15/2008 - 10:28
Probate is a legal proceeding that takes place in the Probate and Family Court in the county where a decedent resided. The probate process provides for: (1) the collection and preservation of the decedent's probate assets, (2) the payment of all debts and taxes owed by the estate, and (3) the determination of the proper distribution of the assets.
The simplest definition of a probate asset is anything held solely in an individual's name at the time of his death, such as a bank account with only the decedent's name on it. After the death occurs, we cannot look at the passbook or statement and identify the new owner of the money. Accordingly, we must look to the decedent's will, and to the probate process, to help us make that determination. If there is no will, the probate court will apply the intestacy statute to determine ownership of the decedent's probate assets, including the bank account.
Non-probate assets, on the other hand, such as an insurance policy with an identified beneficiary, become the property of the beneficiary immediately upon the death of the person who owned the asset. The existence of a will is irrelevant, and the asset will not become part of the decedent's probate estate. Similarly, if a person owned a house with another person as "joint tenants with rights of survivorship," sometimes shorthanded as "jointly," when he dies, full ownership of the property will pass directly to the surviving owner.
This distinction raises an important point: Your will may be just a small part of an effective estate plan. Depending on the size and nature of your estate, you may need to consider trusts, powers of attorney, and how you can structure the ownership of your assets to avoid probate and minimize taxes.
(Submitted by the Editor)