Wednesday, June 2, 2010

What is Probate Law?

"Death, the one appointment we all must keep, and for which no time is set."

Losing a loved one is hard enough; the process of dealing with the departed persons estate can add more pressure to an already stressful situation . But with comprehensive probate laws, this experience can be made comparatively easier and less time-consuming.

Probate is defined as "the legal process of administering the estate of a deceased person by resolving all claims and distributing the deceased persons property under the valid will". Before execution , the probate court must be convinced that the said will is the actual last will or testament. Unless it is contested or shown to contain obvious anomalies, a document purporting to be a will requires little authenticating proof for certification.

In the US, laws as laid down in the in the Uniform Probate Code, approved in 1969 and amended in 1975, 1982, 1987, 1989, 1990-91, and 1997 by the National Conference of Commissioners on Uniform State Laws and the American Bar Association, are followed, although different states may also have their own legislation.

A will or testament is a legal declaration by which a person names one or more persons to manage his estate and provides for the transfer of his property at death. Earlier, a will referred only to real property while testament referred to personal property. This gave rise to the phrase "last will and testament" to cover all assets. Nowadays, there is no distinction between the two.

The probate court appoints either an executor named in the will (or an administrator if there is no will) to administer the process. The executor inventories and collects the decedents property . Next, he pays any debts and taxes, including estate tax in the US, if the estate is taxable at the federal or state level. After these formalities are completed, he distributes the remaining property to the beneficiaries, either as instructed in the will, or under the intestacy laws of the state. All these steps come under the ambit of Probate Law.

The history of the word "probate" can be traced back to Latin, old French, and old English words with somewhat different meanings. The earliest definition, dated to 1463, means the "official proving of a will," and originates from the Classical Latin word probatus, meaning "a thing proved". The word also traces its origins to the old French word prouwe (prover), dated circa 1175, and to the English and Welsh words prove and profi (to test) respectively.

On account of the costs of court involvement and the consultation of lawyers in the probate process, many people try to minimize costs associated with the probate process . There are considerable legal and tax complexities involved in the probate process ; hence, it is advisable to have a will and speak with a lawyer and financial professional to ensure that the individuals heirs are not left with the complicated and often messy task of distribution of the estate upon his demise.

Some of the methods employed to avoid probate are:

Living trust of assets. P.O.D (paid on death) designations on bank accounts. T.O.D (transfer on death) on brokerage accounts, 401ks and IRAs Life insurance, savings accounts, and joint tenancies with the right of survivorship. Segregated fund in a life insurance company.

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By Jim Knight


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