How are Assets Distributed in the Probate Process?
By Space Coast Daily // November 9, 2020
Heirs of a deceased person include all people that the dead appointed as heirs. Heirs can be brothers, sisters, spouse, parents, aunts, uncles, nieces, nephews, distant relatives, friends, neighbors, co-workers, and anyone else.
However, if the person has no living relatives, all the estate funds go to the state.
Obtain a Family Attorney
For these reasons, a family attorney is so essential that the family attorney helps the person create a will saying what parts of the estate go to which beneficiaries.
Be aware that not all assets go through probate. Assets that own a title with the deceased name do not go through probate court. The court can take the deceased name off an asset and add the beneficiary’s name.
For example, as parents age, it is a good idea for an appointed, trusted family member’s name to be added, if possible, to all savings accounts and checking accounts, homes or homes, vehicles, certificates, safety deposit boxes, and other assets making these assets joint.
When that person passes away, the court designated assets to family members and friends as the deceased designated. Thus these assets become joint and do not have to go through probate court.
Assets do not go through probate court if the asset is jointly owned, such as a car. Upon the death of the person, the joint name on the car goes to the survivor.
A jointly owned asset already has the beneficiary designated upon the death of the person. If the deceased person had some trust assets, these might not have to go through probate court. Your family lawyer can help with these possibilities before the person dies and guide and direct you through the probate court process.
All assets with a joint owner automatically transfer to that person upon the death of the other owner. For example, a husband buys a new car, and the wife’s name is also on the vehicle. If the husband dies, the wife automatically owns the car.
The same scenario applies to homes, investments, certificates, properties, bank accounts, and more. Joint ownership of any assets automatically goes to the survivor. If both joint owners die simultaneously or soon after, the asset must go through probate court and designated to the heirs.
A transfer of ownership happens as soon as the person dies. If the deceased had a will and designated that the asset goes to a step-child, the child is disinherited, and the asset goes to the survivor. The survivor can keep or sell the asset, or they can give it away.
If a person dies before you do, the court distributes all of the deceased person’s assets according to their wishes. Assets go to designated beneficiaries as the deceased person assigned.
If a beneficiary is incapacitated, the court becomes a guardianship or conservator of those funds.
Tenants-in-Common is Joint Ownership
This type of joint ownership says that if you are joint on an asset and one dies, the asset does not automatically transfer to the survivor but is distributed through the courts as directed in the deceased person’s will to their heirs. The dead person’s will must say that the survivor is beneficiary to the asset.
Designated Beneficiaries Make Estates Easier
Several assets appoint a beneficiary upon death. These assets include but are not limited to life insurance policies, IRAs, many bank accounts, and retirement plans. Upon death, these assets do not have to go through probate court. The clencher to this is that if the beneficiary dies before the asset owner, then the assets go through probate court.
If one owner dies and the other is incapacitated, the court takes control of the asset by becoming the guardian or conservator. The court never pays out an asset to someone who is incapacitated or too incompetent to handle the asset. In these cases, the court may appoint supervision over the asset.
If an asset names a minor as a beneficiary, a guardian is appointed by the court for the minor. Probates usually do not pay any assets directly to a minor or even to another person for the child’s benefit. The court generally requires a guardian who is court appointed.
Living trusts usually avoid probate court. However, if a will stipulates a trust, all assets must go through probate court. This step puts trust in effect. If you do not mention certain assets in the will, these assets must also go through probate court.
It is a good idea for everyone to have a Patient Advocate for a loved one, which stipulates all medical and financial directives come from the advocate as designated by the patient.
The financial advocate is generally joint on all bank accounts. This person and their attorney follows the legal directives and responsibilities regarding the estate of the deceased and assets distributed to beneficiaries named in the will in the state of Kentucky.
This financial advocate must obtain many death certificates and letters of administration because the advocate must present the proof of death to each institution.
The following responsibilities fall on the advocate or attorney if there are no heirs.
• Register the Death
• Must find out if the deceased had a will
• Apply for a grant of probate and find out about any inheritance tax
• Inform all organizations about the death and close all accounts
• The advocate pays off all outstanding debt from estate funds.
• File a claim on Life Insurance plans
• Calculate the value of the estate
• Share out the remaining assets.
These legal steps are a lot for anyone to do who is going through the grief process, so it is vital to have a family attorney who can guide and direct the advocate’s responsibilities.