When someone passes away, probate is almost always inevitable. This legal process has been around in one form or the other since ancient times, and it has an important place in estate planning. In some cases, probate might be optional or shortened considerably. Read on to learn more about probate and the so-called small estate.
Why Does Probate Exist?
If you've done any research about estate planning, you will have come across the concept of skipping probate. In most cases, however, probate must go forward no matter what you do. Probate performs some functions that other estate-planning methods miss, and definitely serves a purpose. Since probate began, it has provided others with an opportunity to be paid money owed from the deceased, dealt with charitable donations to entities, and ensured that taxes and other bills are paid. In some cases, certain types of estates may be eligible for special treatment, however.
Normal Probate Procedures
Most of the time, probate can take months to be complete. It consists of the will being filed in the local county probate court and then:
- The will and the signatures are checked and validated.
- An executor or personal representative is appointed and certified.
- An inventory of estate assets is performed.
- Notices are sent to creditors of the estate asking them to come forward and file claims.
- Certain debts are paid using estate assets (mostly tax debts).
- The estate is closed and the beneficiaries receive their inheritances.
Small Estates and Probate
Each state has its own probate rules. When it comes to small estates, this concept is also known as a simplified, streamlined, or modified filing. The determination of a small estate is based on the value of the assets in the estate. When the asset value drops below a certain number, probate may be skipped or shortened. For estate purposes, assets include:
- Real estate.
- Vehicles, boats, recreation vehicles, etc.
- Funds in bank, investment, and retirement accounts.
- Precious metals and jewelry.
- Art and collectibles.
If you have placed any of the above assets in a trust or have used other designations, they may not need to be added to the estate. For example, some use deeds and payable-on-death designations to avoid probate. If an estate qualifies for small estate status, you might be able to skip, for example, the inventory and other tedious and lengthy actions.
A probate lawyer can advise you about your assets and the likelihood of qualifying for small estate status.