What Is Probate?
What Is probate? 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 Is Probate?
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 the deceased did not have a Will, then the property will be distributed according to Missouri law regarding intestacy (dying without a Will).
Who Goes Through Probate?
Not all estates must go through probate. If an estate falls below a certain threshold, it is considered a “small estate” and settling the estate doesn’t require court supervision. 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 types of assets that pass without probate are:
- Joint Tenancy assets-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 identify who should receive the account assets after their death.
If a decedent has created a Living Trust to hold his or her’s most significant 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.
What 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.
The imposition of an inheritance tax takes place after the transfer of assets. Therefore, an inheritance tax must be paid by the beneficiary, not by 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.
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