Probate: What is it?

Probate refers to formal court proceedings overseen by a judge during which a deceased person’s assets and belongings (often referred to as a person’s “estate”) are legally transferred to their heirs.  Some common things that happen through probate court are resolving disputes between heirs and other creditors of the estate, settling creditor claims to the estate, and legally transferring ownership of the deceased person’s assets to an heir or other creditor.  Probate can often be a long, arduous and costly process.  The process can sometimes take a few years to complete.  It can also be the source of heated disputes between family members who don’t agree as to how the property should be divided.  That’s why it is important for a person to have a plan in place that saves your loved ones the added stress of dealing with unnecessary probate proceedings when you pass on.

In some cases, probate court is necessary, but in other cases, it can be avoided altogether.  Probate court proceedings are almost always necessary when you die with an ownership interest in any real estate or property.  This is true whether you have a will or not.  If you do have a will, the court will have to determine if the will is valid so that the property can be transferred to an heir legally.  If you don’t have a will or if the court determines the will is invalid, the court has to determine who receives the property under the property division laws of Iowa.  Generally, if you die without a will, Iowa law says your property will go to a spouse, children, or your parents, but more complicated rules may apply in some cases.

In some cases probate court is not necessary.  If you don’t own any property and your estate is less than $25,000 in worth, you may not have to probate your estate.  Certain kinds of property and financial instruments may also be able to be exempted from probate through careful planning.  For example, life insurance policies, stocks and bonds, and some kinds of bank accounts may be exempt from probate court proceedings if correctly held.  Other ways of avoiding probate court may be available depending on the kind of property you own. 

The decision to try to keep your estate out of probate (or to keep your assets in probate court) is one that should be discussed with a competent attorney.  Trying to keep all your assets out of probate court could turn out to be more costly and time consuming that keeping them in probate court.  The attorneys at GRL Law can help you navigate the often unfamiliar waters of probate law and will assist you in devising an estate plan that will help you minimize your costs, time expended, and tax burden, while maximizing the benefits passed on to your loved ones.  

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