Whenever the discussion turns to probate, I have noticed that there seem to be a lot of questions and misunderstandings surrounding what it is, how it works and if it is necessary. Over the next few weeks, I will try to address some of the more frequent q
Posted on Mar 21, 2013 5:20pm PDT
Whenever the discussion turns to probate, I have noticed that there seem
to be a lot of questions and misunderstandings surrounding what it is,
how it works and if it is necessary. Over the next few weeks, I will try
to address some of the more frequent questions and misunderstandings that
I encounter.
The first question is “What is probate”?
When someone dies, probate is a way in which we can transfer their assets
to their beneficiaries and make sure their creditors are paid. Think of
it like the steps involved in closing and wrapping up a business. This
business just happens to be the business of someone’s life.
Probate is the wrapping up process used when someone dies with a will (testate)
or without a will (intestate). It is not the primary wrapping up process
used when someone dies with a trust, but as we will see in later weeks,
probate can still play a very important role in wrapping things up when
someone dies with a trust.
When I explain how probate works, I use the example of a car. When someone
prepares a will, they are designing a car that they keep in their garage
until they pass away. They decide what the car will look like, who can
ride in the car (the beneficiaries) and what they want to put in the trunk
of the car (the assets). They can do everything to make this car ready
for driving except buy tires. So when they pass away, the car can’t
leave the garage until it gets tires. The only way to get tires is to
go through probate. Once the tires are on the car, it can leave the garage
and begin the journey that it was designed to take.
When someone does not prepare a will, there is still a car with beneficiaries
and assets in the trunk sitting in their garage. The only difference is
that instead of designing the car themselves and deciding who the passengers
will be and what will be in the trunk, they have accepted the generic
model car and the passengers that the state of Florida designs as the
default plan for everyone who dies without a will. That car still has
to go through probate to get tires so it can leave the garage.