Real estate probate occurs when a person pass away and they have income, assets and real estate that will need to be split among heirs. The most common reason for real estate probate is the lack of a will or living trust with which to guide the process of dividing legal properties.
At the time of death, when a will or living trust is not present, a legal entity will take control of the deceases assets, including all real estate holdings. The purpose of the seizure is to gather all information about the deceased financial status and ensure all tax liens, debts owed and creditor claims are paid in full before the assets are equally divided among the next of kin.
In real estate probate, if the amount owed to outside creditors is more than the liquid assets of the deceased, the real estate, among other physical properties will need to be sold in order to raise the funds needed to settle all debts to the estate. The probate court or probate lawyer will be assigned to this task in hopes of finalizing the process as quickly as possible.
In order to keep monetary assets out of probate, all bank accounts will need to be set up as Payable-On-Death accounts. This simply means that upon the death of the account holder, the beneficiary, named within the account paperwork, will inherit all of the many held in that banking account. This type of bank account is automatically entered into when a couple holds a joint bank account, but in the case of the death of both account holders, it is a good idea to name a third beneficiary to the account.
A living trust is the most effective way to keep all real estate out of probate. A living trust can be set up well before death and simply specifies who will inherit which of your physical and monetary belongings. The living trust does not, however, remove the need for the creditor debts to be paid. Often an executor will be set up in order to handle all debts on the estate before the final inheritance matters can be taken care of and settled.
To complete eliminate the possibility of real estate probate, the owner of the real estate can choose to give away all real estate holdings prior to death. These gifts will greatly reduce the amount of real estate owned and will permanently transfer all ownerships out of the estate.
At the time of death, no one wants to have to deal with the court system fighting over which properties and real estate holdings will be sold and which will be transferred to family members. A living trust can stop all real estate probate by clearing giving all real estate to family members so named upon death. In lieu of a living trust, the real estate owner can simply choose to give away the real estate to the family members before death thus removing that physical holding from the estate of the owner. Cairnhill 16