Estate Planning, Wills, Probate, And Transfer Of Assets - 2021 | Best Guide - CPA Clinics
A will allows the testator (the person creating the will) to specify:
State law determines who receives probate property if a decedent dies without a will.
Example: Nola died at age 103 without a will. Under state law, her property passes to her descendants per stirpes. Nola’s three children, Brian, Kyle, and Lloyd, all died before Nola. Nola’s six grandchildren inherit her $900,000 estate. Brian’s only child receives $300,000. Kyle’s two children each receive $150,000. Lloyd’s three children each receive $100,000.
The disposition of property after death depends on the form of ownership of each asset. Some assets may need to be probated (go through a court process) while others pass automatically to new owners. Property ownership rules vary by state law. Generally:
Other assets — those that will not pass automatically to new owners at death are subject to state probate rules. These assets pass to the beneficiaries named in the decedent’s will or, if none, according to state intestacy law.
Probate is the court monitored process for administering the estate of a decedent. The process includes notifying heirs, submitting and validating the will, collecting the decedent’s assets, paying taxes and creditors, and distributing property to the estate’s beneficiaries. An estate is probated in the decedent’s state of domicile. If the decedent owned real property outside his or her home state, an ancillary probate proceeding in that state may also be required. Probate is required if the decedent’s probate assets are above the state’s threshold (generally $10,000–$100,000). When probate is required, non-probate assets are not included in the proceeding.
If the decedent’s probate assets are less than the state threshold, no court proceeding is required. The assets can be collected using an affidavit under state procedures for small estates. Typically, the decedent’s successors (those entitled to property under the will or state law) complete an affidavit following the form specified by state law. The affidavit is given to anyone in possession of decedent’s as‑ sets (e.g., banks, brokerages, or DMVs). Ownership of the assets passes directly to successors, who also report any after death income.
Assets only probate assets pass according to the terms of a decedent’s will. Non-probate assets pass to the surviving joint tenant or beneficiary.
Example: Betty’s will leaves half her estate to her church and half to her children. In 2019, Betty changed title to her home to joint tenancy with her children. When Betty died, the only probate asset was her car. Her church is entitled to one-half of the value of Betty’s car.
