Probate is the process of settling a deceased person’s obligations. It involves determining the assets of the deceased, paying taxes and debts, and distributing property according to the will. Probate rules vary by jurisdiction and complexity of the will.
When someone dies in a will, the act of settling the person’s obligations is called the probate process. Probate rules will vary based on both the jurisdiction and the complexity of the will, but there are some basic concepts that are in effect regardless of where the person – called the “testator” – resided prior to his death. There are three basic steps to the probate process. Firstly it is a determination of which property belongs to the testator and can be admitted to the probate process; second is the payment of any taxes and associated debts of the testator at the time of his death; the last is the distribution of any property to the appropriate parties.
The first step is determining what assets the testator can be considered to own for purposes of the probate process. The complexity of the succession rules in this step will vary based on the nature of the property. The more complex probate rules often arise from determining whether property jointly owned by a husband and wife can be admitted to probate. For example, in some jurisdictions a home that is owned by the couple at the time of death may automatically go to the spouse of the testator, while the testator may be free to contrive his or her interest in the home through a will in other jurisdictions.
The second set of probate rules has to do with the settlement of the testator’s debts when determining his estate on death. The first step in this process is usually paying all your property taxes. Typically, the amount of estate tax that the testator must pay depends on the jurisdiction and the testator’s net worth, as determined by the estate deemed applicable in the previous step. In addition, the estate will have to settle any debts of the testator to private individuals. Probate rules will dictate where these payments will come from and whether any of the testator’s planned expedients – property intended to be given away in a will – will be eliminated to pay off the debt.
The final step in the probate process is the distribution of assets as dictated by the will. The jurisdiction’s probate rules will consider various factors in determining whether the instructions in the will are valid, and will make any adjustments the law deems necessary. For example, if a disposition had to be made to pay off the testator’s debt, the succession rules may provide for an alternative disposition for the person who should have received the gift.
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