What is Probate?

by MSO
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There are probate fees of 0.5%-2% of your estate, depending on your province or state. These fees are paid to the government.

Probate is the legal process of administering the estate of a deceased person. All claims should be resolved and the person’s property distributed under the valid will.

A court will need to decide if the will is valid. Probate makes sure that the instructions of the deceased are followed, decides the executor as the personal representative of the estate, and makes a formal judgement in the interests of heirs and other parties who may have claims against the estate.

Here are some of the things you need to know about probate administration:

* Creditors need to be notified and legal notices published.

* Executors of the Will need to be guided in how and when to distribute assets and how to take creditors’ rights into account.

* A Petition to appoint a personal representative may need to be filed and Letters of Administration obtained.

* Homestead property, which follows its own set of unique rules in states like Florida, must be dealt with separately from other assets. In many common law jurisdictions such as Canada, parts of the US, the UK, Australia and India, jointly owned property will pass automatically to the surviving joint owner separately from any will, unless the equitable title is held as tenants in common.

* There are time factors involved in filing and objecting to claims against the estate.

* There may be a lawsuit pending over the decedent’s death or there may have been pending suits that are now continuing. There may be separate procedures required in contentious probate cases.

* Real estate or other property may need to be sold to effect correct distribution of assets pursuant to the will or merely to pay debts.

* Estate taxes, gift taxes or inheritance taxes must be considered if the estate exceeds certain thresholds.

* Costs of the administration including ordinary taxation such as income tax on interest and property taxation will be deducted from assets in the estate before distribution by the executors of the will.

* Other assets may simply need to be transferred from the deceased to his or her beneficiaries.

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