What Does Probate Mean?

What Does Probate Mean?

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What Does Probate Mean?What Does Probate Mean? When a family member dies, what happens to the estate; the bank and savings accounts, the stock and bond accounts, the real estate, insurance, trusts, annuities, business interests, and other assets? It all depends on probate.

What Does Probate Mean?

Nolo Law for All says “Probate is a legal process that takes place after someone dies. It includes:

  • proving in court that a deceased person’s will is valid (usually a routine matter)
  • identifying and inventorying the deceased person’s property
  • having the property appraised paying debts and taxes, and
  • distributing the remaining property as the will (or state law, if there’s no will) directs.

If deceased did not have a Will, then the property will be distributed according to Missouri law regarding intestacy (dying without a Will).

What Does Probate Mean?

Not all estates must go through probate. If an estate falls below a certain threshold, it is considered a “small estate” and doesn’t require court supervision to be settled. Click here to find out Missouri’s small estate threshold and procedure.

Not all assets are subject to probate. Some kinds of assets transfer automatically at the death of an owner with no probate required.  The most common kinds of assets that pass without probate are:

  • Joint Tenancyassets-when one joint tenant dies
  • Tenancy by the Entirety or Community Property With Right of Survivorship
  • Beneficiary Designations-retirement accounts and life insurance policies have named beneficiaries.
  • Payable on Death Accounts/Transfer on Death Accounts-bank and brokerage accounts can have designated beneficiaries, too. The account owner can fill out forms to designate who should receive the account assets after their death.

If a decedent has created a Living Trust to hold his or her’s largest assets, then that estate, too, won’t go through probate, unless the assets left outside of the trust add up to more than Missouri’s small estate limit.

How about estate taxes and inheritance taxes?

Since 2005, Missouri doesn’t have a separate state estate tax. The estate must file and pay all necessary state and federal taxes including the final income tax return of the deceased and any real estate or personal property taxes owed by the deceased.

An inheritance tax is imposed after the transfer of assets. Therefore, with the imposition of an inheritance tax, the beneficiary pays the tax, not the estate. The good news is that the State of Missouri does not collect inheritance taxes.

Disclosure: Estate taxes, wills, and probate are areas that need the expertise of a lawyer who specializes in these areas. Always seek professional advice.

Even before the property has cleared probate in Missouri, the heirs may decide to quickly dispose of the property. That’s where Terra Firma Property Solutions, LLC  can help. The heirs may not want to bring the house up to today’s standards. Today’s buyers want quartz counter tops, the latest stainless appliances, and wine coolers. The heirs may not have the money for deferred maintenance issues or renovation.  Your family may have no inclination to spend time renting, or staging and showing the house.  The heirs may live in another city and don’t have the time or money to travel back and forth to the Kansas City area.

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Photo by Melinda Gimpel on Unsplash

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