Probate is the legal process of administering the estate of a deceased person by disposing of all claims and distributing the deceased person’s property. The Darby Law Group will handle all matters in the administration of the estate from the appointment of the personal representative through the final distribution of assets and closing the estate. The probate process may include management of the decedent’s property, sales and transfers of estate assets, determination of beneficiaries and their interests, and the determination of homestead and other exempt property.
It is important to identify the probate estate. Depending upon how property is titled, there are three (3) ways property can pass at death: (1) probate property which passes under the will; (2) contract property which passes by the terms of the agreement; and (3) jointly owned property. Both (2) and (3) do not pass as part of the probate estate, but pass according to their own terms. The probate and non-probate estates are described as follows:
1. Probate Estate. The probate estate includes those assets (a) held in the sole name of the client, (b) held in the client’s name as a tenant in common with others without rights of survivorship, and (c) assets which are payable to the client’s “estate” upon his or her death. The will controls and disposes of only these assets. If there is no will, the laws of intestacy apply.
2. Contract Estate (non-probate). The contract estate includes life insurance, pension plans, and other assets in which the client has named a beneficiary in the contract. The contract estate also includes property transferred to a revocable trust agreement. These are non-probate assets which pass directly to the beneficiary pursuant to the contract and do not pass by will as part of the probate estate unless the estate is the named beneficiary.
3. Joint Ownership Estate (non-probate). The joint ownership estate includes property (e.g., stocks, bank accounts, real estate) that is held as tenants by the entirety or joint tenants with a right of survivorship. It passes by operation of law. This property does not pass by will, by a revocable trust, or by intestacy.
The client must be reminded that only the probate estate passes under the will. Without a careful review of how each asset is held, it is impossible to be sure the estate plan will carry out the client’s planning objectives. If all the property passes outside the will, even a carefully drafted will may not accomplish the client’s objectives.