subject: Using Probate Wills to Protect Inheritance Property [print this page] Using Probate Wills to Protect Inheritance Property
Probate wills refer to a last will and testament that is recorded through probate court. Every estate that is not protected by a trust is required to undergo estate settlement procedures known as probate.
Probate wills are presented to court upon death. A case is opened and the estate executor designated within the Will is confirmed to their position. Afterward, the estate executor engages in estate settlement duties.
The type of duties required will vary, but normally include securing valuable assets and personal property owned by the decedent, paying outstanding debts and taxes, and distributing inheritance property according to directives of the Will.
The probate process varies by state. Many states require estate administrators to obtain court confirmation and all aspects of estate management are supervised through the court. Some states allow estate executors to handle all facets of estate settlement without court interference. Designated probate personal representatives should obtain legal counsel, paid by the estate, to ensure estate settlement adheres to state probate laws.
When decedents have a surviving spouse, inheritance property almost always automatically transfers to the spouse. However, decedents can bequeath inheritance gifts to anyone they choose. Beneficiaries are usually direct lineage relatives, but can also be charitable organizations, schools and colleges, and personal friends.
Probated inheritance property cannot be distributed to beneficiaries and heirs until all other facets of estate settlement are completed. The exception is when decedents engage in estate planning strategies to keep assets out of probate.
Individuals with bank accounts can establish payable on death beneficiaries to receive funds in their account upon death. When beneficiaries are designated, checking and savings accounts are exempt from probate and funds can be distributed once certain protocol has been completed.
Most states require estate administrators to provide date-of-death value forms to the county tax assessor's office and validate the decedent was current on taxes. Funds are released when beneficiaries present validated forms, along with photo ID and a copy of the death certificate.
Individuals with retirement accounts and financial portfolios can establish transfer-on-death beneficiaries. These types of accounts allow beneficiaries to transfer funds into their own name to avoid tax consequences. Beneficiaries can also elect to cash-out investment funds for lump sum cash. It is best to consult with a tax accountant to achieve maximum tax-savings.
Probate wills can also be used to disinherit direct lineage relatives. When relatives are disinherited the Will must include a disinheritance clause stating the reason to write the person out of the Will.
The last will and testament provides everyone the chance to have their final say at death. Without a legal Will, probate law dictates who receives property. When a person dies without a Will, estate settlement can be prolonged several months and almost always ignites family disputes. Executing probate wills is the greatest gift anyone can leave behind and takes little time to implement.
