All probate assets must go through the probate process before being distributed to beneficiaries. Though the rules for asset distribution in probate courts seem straightforward, they are fairly complex. While probate assets are allocated according to a default beneficiary designation, you can determine who gets what by writing a will.
Understanding how the probate process works is essential to maintaining control of how your assets are distributed once you pass. And if a family member’s assets are going through probate, you can better protect your inheritance rights by understanding the process.
At Batson Nolan PLC, we can work with you throughout the probate process. Our attorneys have years of experience with probate and other estate planning matters. We craft innovative and effective solutions to even the most complex estate planning needs. Schedule a consultation today.
What Is the Probate Distribution of Assets?
Probate is the official process of closing out an estate after someone dies. The court directs the estate to pay its debts and taxes during this process. After the debts and taxes are paid off, the court facilitates the distribution of the rest of the estate to heirs and other beneficiaries.
The probate distribution of assets involves the processes and rules that the court uses to determine who is entitled to an estate’s assets and to distribute the property to those people.
Only probate assets must go through probate court. Non-probate assets have slightly different rules governing distribution. You generally have more control over the distribution of non-probate assets, as this process involves much less oversight by Tennessee courts.
As stated, understanding the processes involved in probate court is essential if you are inheriting probate assets or wish to have control over the distribution of your assets. Further, there are legal strategies you can use to minimize the number of probate assets in your estate, thereby avoiding probate altogether for much of your estate. Limiting what must go through probate can help you reduce court fees and protect your assets from certain creditors. You can also minimize your estate’s tax burden while maximizing the value of your estate.
How Is Probate Distribution of Assets Conducted?
If an estate has probate assets, there are specific procedures the court must follow before disbursing the property to heirs. The court plays a particular role in these procedures and is a significant factor in determining when the estate can be distributed.
What Assets Must Go Through Probate?
Understanding which assets are distributed through probate is essential to understanding the process. Further, knowing how to turn a probate asset into a non-probate asset can save your estate valuable time and money.
In general, all assets that are owned exclusively by the person who died (the decedent) must go through probate court. But there are some exceptions, such as for small estates worth less than $50,000 with no real estate. Also, any property that is jointly owned does not need to go through the probate process. Further, assets owned by a trust or subject to a life estate or other death conveyance (such as a life insurance policy with a designated beneficiary in the formation documents) can avoid the probate process.
An experienced estate attorney from Batson Nolan can help you determine if a given asset must go through probate. They can also work with you to structure your assets to avoid probate.
Role of the Court
During the probate process, the court validates the decedent’s will. If there is no will, they distribute the estate based on Tennessee’s intestate succession laws. The court also ensures that the estate properly notifies creditors and pays all legitimate debts and taxes. Once these payments are made, the court directs the executor of the estate to distribute assets to beneficiaries. Finally, the court oversees the distributions.
Probate Process
There are several key steps that every probate estate must go through.
- The estate executor or an interested party must petition the court to open the decedent’s estate.
- The court ensures that legal notice is provided to any heirs, beneficiaries, and creditors.
- The executor gathers all of the decedent’s assets and uses them to pay all valid estate debts and taxes.
- Once the executor pays the debts, they distribute the assets to heirs and beneficiaries according to the decedent’s will or Tennessee’s intestate succession laws.
This process may seem simple, but each step takes time and can involve several court hearings depending on the estate. If any disputes arise, the probate process can grind to a halt.
When Can a Probate Estate Be Disbursed?
The executor is responsible for distributing the estate after probate. They can do so once all the estate’s debts are paid and the period for creditors to file a claim has expired. The court must also sign off on the plan for distribution before assets are transferred to beneficiaries. An experienced attorney can help you determine how to distribute an estate after probate.
Understanding the Final Distribution of Estate Assets
Several factors determine the final distribution of an estate’s assets. As stated, the estate must first pay all legitimate debts and taxes. Writing a will does not protect assets from creditors, but legal vehicles such as trusts and life estates might be able to help you protect certain assets.
Next, the executor distributes the estate’s assets to heirs and beneficiaries according to the decedent’s will. The executor is responsible for getting the assets to heirs and beneficiaries.
If there is no will, the state’s intestacy laws govern the share of assets allocated to heirs.
Some cases are easy, such as when a decedent is married with no children. In this case, the spouse gets the entire estate. When more complex family dynamics exist, distributing the assets can get much more complicated.
Ultimately, without a will, you do not have much control over who inherits your assets. Working with a skilled attorney can help you control where your assets will go and maximize the benefit they can provide.
Common Issues and Challenges
Several issues and challenges spring up regularly during this process.
First, many estates are subject to debts and taxes that exceed the estate’s total value. In these cases, the estate can sometimes end up entirely in the hands of creditors and the government. Fortunately, you could avoid this by working with an experienced estate attorney.
Second, conflicting provisions within a will can lead to disputes, more time in probate, and higher court and attorney’s fees. These payments come from the estate and reduce the benefit provided to heirs. Conflicting provisions are a particular concern when it comes to do-it-yourself wills.
Finally, disputes can arise between interested parties. Disputes come in the form of contested wills, executor misconduct, and creditor claims. When conflicts occur, litigation can eat into an estate’s resources and reduce its value. Sometimes negotiation and mediation outside of court can lead to a better outcome for everyone involved. But the best way to avoid disputes during the probate process is to work with an experienced attorney to craft an airtight will. A well-written will should contemplate and handle potential issues before they damage the estate.
Contact Batson Nolan PLC for All Your Probate Needs
If an estate you have an interest in is going through probate, Batson Nolan can advocate for you. And before the need for probate arises, we can work with you to craft a rock-solid estate plan. Our attorneys have years of experience handling various estate planning matters. They specialize in providing every client with a collaborative and personalized experience that closely reflects their needs. Contact Bason Nolan today.