What is Probate?
Probate is the court supervised process by which a decedent’s assets are transferred to his heirs, either by his Will, or if there is no Will by the statute of intestate succession. The word "probate" has its origins in the Latin "probatum" which means a "thing proved" and "probare" which means "to prove".
Assets Subject to Probate
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Personal property such as vehicles, furniture, artwork and jewelry
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Financial accounts owned individually rather than jointly with the right of survivorship or without a payable on death beneficiary
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Real estate that is owned individually rather than jointly with right of survivorship
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An ownership interest in a business whether a sole proprietorship or individually owned shares in a small company.
Assets NOT Subject to Probate
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Annuities
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Life insurance proceeds
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Retirement plan benefits from IRAs, 401(k)s or profit sharing plans
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Property jointly titled with the right of survivorship
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Assets held in a living trust
The Probate Process
The probate process involves notifying the decedent’s heirs at law and the beneficiaries of the decedent’s Will of the existence of the Will. The notice provides them the opportunity to contest the Will in the event that the decedent did not have the requisite mental capacity or was unduly influenced by a beneficiary. The probate process also involves compiling a list of the decedent’s assets so that the assets may be distributed according to the decedent’s wishes. Finally, probate involves accounting for all of the assets in the decedent’s estate, including the payment of estate taxes, debts and expenses incurred by decedent during his life or as a result of the administration process.
Probate Costs & Expenses
The financial costs of probate include attorney’s fees and court filing fees. The court filing fees are minimal in Ohio for example. However, the fees for the attorney might be significant. In Hamilton County, Ohio, an attorney who performs legal services for an estate may receive 5.5% of the first $50,000 in assets, 4.5% of the next $50,000 in assets, 3.5% of the each of the next three one hundred thousand dollars and 2.5% of all assets in excess of $400,000. Additionally, attorneys may receive 1% of all assets not subject to the probate process.
Because of the potentially large attorney’s fees, an individual can save his heirs money if he minimizes the exposure of his assets to the probate process. If an individual can avoid probate on his estate, the only significant legal work that will have to be done is the preparation of the state estate tax return if the estate exceeds $338,000 and the federal estate tax return if the estate exceeds $2,000,000.
Probate records are open to the public. Therefore, the assets owned by an individual at the time of his death can be seen by members of the community. As a corollary to this, the amount of assets inherited by each of his heirs is also a public record. With more probate courts placing their records on line, the public will be able to access the records of deceased members of the community with a few mouse clicks.
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