When a person dies, their estate goes through a process called Probate. This probate process is held through the courts and administers the entire estate. Everything that person owned is assessed. The taxes that were due or unpaid are taking care of and the assets owned will be distributed among the individuals identified in the will. The family home is one of the assets that will be processed in the probate courts. If there are any outstanding debts, the court has the right to withhold the family home and possibly sell it to recover from those outstanding debts.
Keeping your home out of a probate court is the only way for a family to hold on to their home. There are a few ways that you and your family can insure your home stays within the family and not sold at an auction for a portion of what it’s worth.
- Living Trust: There are alternatives to the type of will that is widely known as the traditional will. With a living trust, the family can continue to live in the home and have it managed by a trustee. This trustee will be responsible for any property or assets that are placed in their care through the living trust. The trustee also takes ownership of the assets. They then manage them to benefit the beneficiaries of the original trust.
- Joint Ownership: If the home is placed in two people’s names, then those people are responsible for the property. If one of them passes away, the property is automatically left to the living party. Upon the death of that person, the home could go into probate court unless another method is completed before said death.
- Transferred Upon Death: Once a person has passed away, their assets can be transferred over to an individual that they have preset in documentation. When this occurs, the courts cannot take the estate into probate court. Because a contract is signed when the deceased set the beneficiary, the courts cannot challenge it. Everything that is distributed upon their death is done so properly to the right people.
Sometimes a trust does not prevent the assets from going into probate court. This happens when the beneficiaries named are no longer living or are unable to make sound decisions. When this occurs, a power of attorney may or may not prevent the assets from probate court. Contact a professional to learn more about probate court and how to save your assets from it.