Many people have different notions about the probate process. While some think it is a must for every estate, some do not even know what assets can go through probate.
In this blog post, we discussed some common misconceptions about the probate process in NYC.
Knowing these common misconceptions can help you towards better estate planning and minimizing hassles during the inheritance process.
7 Common misconception about probate in NYC
1. Probate is a must for every estate
Some people wrongly think that probate must be done when a person dies leaving property. But it is not so. It all depends on the kind of properties you leave, and the total value of what you left.
In most states, there is a threshold for probate, such that when the value of assets left does not exceed that value, probate will not be done.
In NY Queens probate may only be conducted if the decedent’s estate values above $30,000 at the time of their death.
2. Once the value of estate is up to $30,000, probate must be conducted
Even when a person dies leaving possessions up to $30,000, probate may still not be conducted. It will only be conducted if those assets are probate assets.
Probate assets are those properties held in the decedent’s name alone without any beneficiary designation. So if you have a bank account with $50,000 but you designated a beneficiary in the account, the money will go to the beneficiary outside the probate process.
Typically, the following assets will pass outside probate regardless of the value:
- Assets in a trust
- Real property jointly held with rights of survivorship
- Accounts with designated beneficiary, such as Life insurance, IRA and 401(k), transfer-on-death accounts.
3. There will be no probate if the decedent has a valid will
It is wrong to think that having a will avoids probate. This misconception about probate causes people to make costly mistakes when estate planning, putting their loved ones through a tedious probate process. Every will must be legally validated before its instructions can be carried out, and this is the first stage of probate. So, if you leave valuable and complexly owned assets in your will (for example real property in multiple states), your family would be in for a ride.
4. There would be no probate if there’s no will
Probate process may hold in NYC whether or not there is a will. If there is no will and the estate meets the requirements for probate, then the process will be initiated. Here, the court will decide who gets a share in the estate. Typically in NYC, the surviving spouse gets the first $50,000 and half of the estate, while the children gets the remaining half.
5. The beneficiaries named in the will must get all their entitlement in the will
Some people write wills and allocate amounts of money to their heirs. But sadly, a beneficiary may not get all or anything from what you allocated to them if your estate has huge taxes and debts. Distributing assets to beneficiaries is the last aspect of probate. All other financial obligations of the estate must first be settled, including the decedent’s creditors, state and federal estate tax (if the estate surpasses the exemption amount), funeral expenses, etc. Whatever is left will then go to the beneficiaries. If there’s not enough to settle debts and taxes, the beneficiaries may not get anything in the end.
6. Probate fees are always very expensive
It is always advisable for an executor to hire a probate attorney so that the process can move much quickly and with minimal hitches. However, people worry that the probate attorney fees can wreck the estate. This is not so.
Attorneys may charge executors around 5% for probating an estate. If the court finds out that an attorney’s fees are unreasonable, they may impose a change.
7. Probate takes years before beneficiaries can inherit
It is true that probate process in NYC can be quite lengthy. But it is a common misconception to think that probate ALWAYS takes years.
In fact, the length of probate is usually determined by how much assets are being probated. Simple estates may take less than 6 months to probate if issues like will contests do not arise. It is when issues arise or there are complexly owned assets that probate tends to take much longer.
Get the best of probate by contacting a probate attorney near you NYC
To ensure you get it right, it is advisable to work with a professional.
Call us to get in touch with a probate attorney near you NYC.