Probate may affect the 60-70% of Americans who have no estate plan. Probate may also impact those with no will, no trust, no legal documents whatsoever. If you are one of the 30-40% that do have an estate plan, chances are you have only a simple last will and testament. You probably also think that's sufficient for your situation. However, is it? So, what is probate? The FAQs below will help answer some of those questions in regard to probate and the importance of proper estate planning.
What is probate?
Probate is a legal process in which a court appoints someone, subject to a judge's supervision, to manage a decedent's estate, including paying the debts and distributing the property of the decedent.
What is a probate estate?
A probate estate is the property owned by a person on their date of death that does not have a transfer-on-death, payable-on-death or other beneficiary designation.
How long does probate take?
On average, it takes 12-18 months to probate an estate. Any challenge to the validity of the will or distribution of the estate's assets will substantially lengthen the time.
How much does probate cost?
On average, probate costs between 3% and 5% of the value of the estate's property. Any challenge to the validity of the will or distribution of the estate's asset will substantially increase the cost.
Does a will avoid probate?
No, in order for a will to effectively distribute the property of a decedent, it must be probated.
Does a will have to be probated?
Yes, wills are only legally effective to distribute a decedent's property if probated.
How can I protect a will from probate?
A will cannot be protected from probate. A decedent's will needs to be probated if a person dies with any property in their name in order for it to be legally effective.
What is a living trust?
A living trust is a legal entity, sometimes referred to as a revocable living trust, created by a person to hold title to their property in order to avoid the probate process.
How does a living trust avoid probate?
A living trust allows you to avoid the necessity of the probate process by holding legal title to your property. Since your trust, and not you, holds title to your property at your passing, you do not have an estate subject to the probate process.
What is intestacy?
A legal process defined by state statutes that determines how the property of a person who dies without a will is distributed.
Power of Attorney
What is a health care power of attorney?
A health care power of attorney is a legal document that gives someone else the authority to make medical decisions on your behalf.
What is a durable power of attorney?
A durable power of attorney is a power of attorney that remains effective after the medically declared incapacity of the signer. A durable power of attorney is usually used for financial and property issues as part of a comprehensive estate plan.
Are durable powers of attorney valid after death?
No, all authority granted by a durable power of attorney ends with death of the signer. The authority granted by a health care power of attorney can continue after your death for the limited purpose of facilitating organ donation.
Can you revoke a durable power of attorney?
Yes, a durable power of attorney can be revoked at any time as long as you retain capacity. Generally, signing a new power of attorney revokes the prior version.
What is an advance directive?
A document that provides your instructions for end-of-life medical treatment. An advance directive can instruct your agent to provide or withhold life-support technology.
Why do I need an advance directive?
An advance directive is needed to communicate your wishes regarding end-of-life medical treatment when you are unable to speak for yourself. For example, it can indicate your preferences to your family to not use life-support technology in circumstances when you are unlikely to recover.
When is an advance directive effective?
An advance directive is only effective if you lack the ability to communicate your wishes and a doctor has declared that you have either a terminal or untreatable condition.