Probate is the legal application of a will to the assets of someone who is deceased. It is generally a time-consuming process and requires court authentication of the will, notification of all interested parties and the appointment of an administrator for the person's estate. In cases where there is no will, the court will distribute the assets based on blood relation. The best way to be prepared for a probate issue is to hire an estate attorney.
In general, any item exceeding $20,000 in value is considered a probate asset. The courts will assess taxes and charges against an asset based on its value, then distribute it according to the will.
Examples of non-probate assets include money market, CD and pension accounts; life insurance; and annuities, as long as each is valued under $20,000.
The greatest costs of probate are the paperwork, publication of notices, public court hearings and creditor checks. The prices for such services depend on the jurisdiction and are set by the statutes or courts.
In some states, wills are constructed as trusts to avoid probate. Legislation and laws allowing such loopholes vary from state to state.
Trusts and joint tenancy's create avenues to avoid what some see as excessive taxation of valuable goods, especially when transferred to family members.