When a person passes away, their friends and family members quickly become accustomed to the term probate, especially if the person who has passed has not set up a trust or written a will that dictates the disbursement of their estate. Even if a will or trust has been created, probate courts still play a role in the disbursement of an estate after death.
What is probate? How does it play a part in what happens to the assets of an estate after death? This quick guide will shed some light on the process and what you need to do when a loved one passes away.
What is a Probate?
Probate is a set of court-supervised proceedings that determine how an estate is divided amongst beneficiaries after a person passes away. The process is greatly expedited (and generally less complex and controversial) when a will or living trust has been set up. This is because wills and trusts directly instruct the courts on how to divide and disperse assets among designated beneficiaries. So long as there are no legal challenges to the will or trust, the assets will most likely go to the intended beneficiaries after a person’s death.
The terms of a will or trust are most often overseen by an executor. Executors, personal representatives, and other administrators of trusts and estates are charged with ensuring the terms are carried out legally and faithfully. Keep in mind that the will or trust will have to go through probate, but the process is expedited because the deceased wishes (as outlined in the will or trust) are generally carried out and guaranteed by the executor and the courts.
Surety bonds are also used to provide protection to trustees and beneficiaries, providing financial recompense should the assets that were guaranteed to them are mismanaged. Executors and fiduciaries in charge of estates are generally required by the courts to obtain these types of surety bonds before they can officially begin dispersing the assets of an estate.
What Happens if There is No Will or Trust?
If the deceased person has not set up a will or a trust, the assets of their estate are automatically subject to the laws of probate, which will vary from state to state. Probate courts will intercede and disperse these assets to beneficiaries (generally spouses and/or next of kin) in accordance with the probate laws of the state. This process can become complex and controversial as many people will often bring cases to the courts in order to obtain assets they believe they are rightfully entitled to.
Virtually everything formerly owned by the deceased will go through probate if it is not covered by the terms of a will or included in a trust. That’s why it’s important to always work with an attorney to create a will or set up a trust that covers most of what you own. Everything else becomes subject to the laws of probate.
The only assets that will not go through probate are those that have a named beneficiary. For example, if you have a life insurance policy, which generally has a named beneficiary or beneficiaries, the payout of the policy will not have to go through probate.
Bonds Are Often Required
As noted above, there are many surety bonds associated with the probate process, from fiduciary bonds to conservatorships, trusts, and much more. The courts will generally let you know which bonds you need to obtain. If you have been required to obtain a surety bond for anything involving the probate process, get in touch with one of the surety experts at The Patrick J. Thomas Agency today.
Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.