What Is Probate and Do You Need It For Your Business Or Estate?

When you talk of business or estate, technicalities can blur the line between “needing” something and “wanting” something. Sometimes, a particular factor of real estate can be practical for business, but sometimes they only fit within their particular niche. This is why it’s important to have a good understanding of how these concepts work before actively pursuing them. In the same token, this philosophy works with assessing probate and asking if you need it for your business or estate.

Remember, however, that the explanation detailed below is not something you should apply to your situation all the time. Do remember to consult a business or estate professional such as the ones here in order to learn more about the specific parts of probate and the things it can do for you and the kind of work you do, so you can have a better understanding of its specific effects on your particular circumstance.

According to Financial Post, it might be best to have a good understanding of just what probate can do for you given its purpose. The same article states that sometimes, probate roles are generally considered once you start planning for your estate, or if you’ve been designated executor of the estate of someone else. It’s essential to have a working knowledge of the nature of probate as it can affect its overall use for you, be it you choose to use it for your estate or not.

 

Probate: The Basics

It’s important to recall that probate doesn’t exactly allow the executors to act on the behalf of the estate. This kind of authorization and power isn’t exactly present as an executor, as this is done by a will. Probate, legally speaking, is the process wherein the court can legally confirm the authority of executors to create executable letters probate. When you have a letters probate, you get a wide variety of other “perks” to consider:

• You get proof of the executor’s authority when it comes to third parties. This is relevant as this helps the executor deal with other parties regarding deceased person’s assets. Some third parties ask for probate to ensure they are dealing with the executor authorized by the deceased person, as this protects them from being involved in claims that could be otherwise paid out to the wrong party. The parties that may ask for probate include transfer agents and financial institutions.
• You get some form of ease when the estate requires land to be transferred. It’s important to of course confirm whether or not this rule applies to your particular situation. Howeer, with this, land registry offices will now allow you to transfer land in the deceased person’s name, all thanks to probate.
• You now get authority to create time limits when it comes to claims versus the estate. A probate grant date can be used to measure limitation periods versus claims against the estate.

 

Understanding Why People Avoid Probate

Despite what appears to be perks probate provides, it’s important then to understand why people opt out of the process. The benefits above can be tempting, but here’s the other side of the picture for your reference. Executors or persons planning their own estates may opt out of the probate process because of the following reasons:

• Privacy can be a concern, as the probated assets will now become public document. This will be available for anyone who wants to search for what assets are included in a particular estate’s probate.
• There are also particular taxes and fees charged to probate. This is because certain territories and provinces have fees based on the value of the probate assets, and these tend to be high and generally carried from one place to the next.
• Not all assets necessarily have to be probate either, especially those that you want to transfer. Joint accounts generally get turned over to the surviving joint holder when one of the parties passes away, for instance, and with respect to the terms of the agreement upon signing the account.
• Another thing is that registered accounts such as life insurance policies designated to a particular person don’t necessarily need probate for the transfer, even if the beneficiaries are outside the estate in question.

This means that while an executor can have a lot of uses for probate, it may or may not generally be the most helpful tool in your arsenal. It’s helpful to seek the advice of an estate lawyer or someone versed in estate matters in order to get a full grasp of what will and won’t be helpful to your needs.

 

Conclusion

The brief background on probate above can at least give you a heads up if you need it for your business or estate. Having a good idea about the matter can greatly aid you in deciding on probate, as it can greatly affect aspects of your life and perhaps your business. Knowing what to do after learning what probate is can at least give you the kind of knowledge you can use to make smarter financial choices.

 

Disclaimer: Please remember that this article does not serve as actual legal advice. It’s advised you speak with a lawyer or a legal counsel in order to learn more about probate in order for you to assess if you need it or not.

 

Kiren Manning

Kiren is a estate law writer who enjoys writing about subject in relation to real estate and law. He has written for a few blogs in the past, and enjoys sharing his knowledge with those who enjoy reading. In his spare time he enjoys spending quality time with those he loves.