Published: Monday, 11 January 2016 18:47
Written by Brandon Tyson, Esquire
Many people take great steps to avoid probate. The reasons for doing this are numerous. The biggest reasons are the time and expense of the probate process. One of the primary assets which typically go through probate is the person’s home. A “life estate” or “lady bird” deed is a way to avoid having a home or piece of real property have to go through the probate process.
If a person lists a beneficiary on their bank accounts or retirement accounts, then the funds go directly to the beneficiary without having to go through the probate court process. The lady bird or life estate deed works very similarly.
A person who owns their home outright will execute a deed which reserves to themselves a life estate with a remainder interest going to their beneficiaries. Reserving a life estate means that the person who owns the home retains the right to live in their home for as long as they live. The person can feel assured that no one can take their home from them while they are alive. The beneficiaries who are listed as the remaindermen take title to the property automatically when the person passes away. No probate is needed and all the beneficiaries have to do is file a death certificate in the real property recording office where the property is located.
Typically, life estates are done when persons are older in age. The reason being that once the life estate deed is signed, you can’t change the beneficiaries later on. It is important to have an attorney prepare the life estate deed so that it is done correctly. Depending on the value of the home, there can be certain gift and estate tax implications with such a transaction, which means that consulting with an attorney first is a very good idea.
Published: Monday, 04 January 2016 18:47
Written by Brandon Tyson, Esquire
Most people have heard of probate but are usually unfamiliar with the probate process itself. The process starts when a person files a petition for administration with the court and files the original last will and testament. The person who files is usually a beneficiary or the person who seeks appointment as personal representative. After the petition is filed, the court will appoint a personal representative. The personal representative is the individual who is in charge of administering the estate. Typically, the person appointed in the last will and testament will be appointed by the court.
The personal representative is then responsible for sending a notice of administration to all of the beneficiaries. This alerts the beneficiaries to the fact that a probate case is pending and advises them as to which court the case is in and who is the personal representative. The beneficiaries then have a specific period to object to the probate. The beneficiaries can object to the venue, the appointment of the personal representative or can seek have the last will and testament excluded from the probate.
The personal representative will also file a verified inventory which lists all of the assets which are in the estate.
The personal representative then sends a notice to the creditors. Any known creditors will receive a notice send to the them by certified mail, return receipt. The personal representative will cause to have a notice published in the newspaper in the place where the probate is taking place. The notice will run for two weeks. The creditors then have a period of time to file claims with the court. The personal representative has to evaluate any claims to determine if they should be paid or challenged.
Once all creditors claims are paid or dealt with, the personal representative sends to the beneficiaries a final accounting and petition for discharge. The final accounting shows all of the income earned by the estate and the expenses paid. The Petition for Discharge includes a plan of distribution which shows how the personal representative plans to divide the estate amongst the beneficiaries. Again, the beneficiaries have a chance to challenge the proposed distribution. If there are no objections, the beneficiaries receive their inheritances and the personal representative is discharged by the court.