Friday, August 16, 2013

Decide On Whether To Probate Or Not

Last will and testament is not just a mere paper. It has to go through some legal verification and if worse comes to worst, you have to go through probate. 

Probate is the process by which the courts of a state or country verify that a deceased person's will is legal and what are dictated therein can be implemented such that all beneficiaries can claim what is due them.

However,  going through probate can get complicated.  It is not just a run of the mill when it comes to the will. There will always be conflict especially if it involves a huge amount of money. On the other hand, even with the small amount it can still cause animosity among family members also it will consume so much time of all concerned.

In addition, there's the cost. It can be too high depending on the probated assets' value. There will be legal fees involved, lawyers and other court fees. Also, additional amount that can assist the court to identify the legality of everything stipulated in the will.

To avoid going through this strenuous process, you have to make arrangement to some, if not all assets, changed to the intended recipients without including it in your will. This will make the process quicker and with less red tape.  One option to do this is to create a transfer on death or pay on death account (TOD or POD).   Basically, with these types of accounts the assets goes directly to the beneficiary stated in the documents. Possibly, the best example would be life insurance which does not need to go through probate since the beneficiary is already agreed upon. 

You can prompt transfer on death and pay on death accounts using your banking accounts, securities and other similar financial records. Depends on the state, you can also do this with real estate or with vehicles.

With bank accounts, you can have joint account, even if one party expired the co-owner of the account can take over. For the aforementioned real estate, you can also create joint tenancy or a community property with right of survivorship. With this, same with bank joint account, if one party passed away the one named survivor will claim the ownership without the property going through the probate.

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