Chapter 4 Discussion Questions Flashcards
What is the probate process?
The probate process is a legal proceeding that serves to prove the validity of any existing will, supervise the orderly distribution of the decedent’s assets to the heirs, and protect any creditors by ensuring that valid debts of the estate are paid. Probate is also the legal process for the surviving heirs to obtain legal title to their inherited property.
What are some advantages to the probate process?
Protects creditors, provides clear title to heirs, improves the likelihood that parties of interest will receive notice and opportunities to be heard. Provides for an orderly administration of the decedent’s assets
What are some disadvantages to the probate process
May be costly. May result in delays. Open to public scrutiny.
What are some alternatives to probate regarding the disposition of property.
Property held in tenancy by the entirety or joint tenancy with rights of survivorship. Property held within a revocable living trust. Proceeds of an insurance policy with named beneficiary. Pay-on-death or transfer-on-death accounts for bank and investment accounts.
What are the main differences between and executor and an administrator?
The main differences between an executor and an administrator are that the decedent chooses the executor while the probate court names the administrator. While the administrator must post bond, that requirement can be waived for the executor by the decedent in the will.
What are the duties of an executor?
Locates and proves the will. Locates witnesses to the will. Receives letters testamentary from court.
What are the duties of an administrator?
Petitions court for his or her own apartment. Receives letters of administration. Posts the required bond.
What are the duties of both an administrator and an executor?
Locate and assemble property. Safeguard, manage, and invest property. Advertise in legal newspapers that the person has died in order to put creditors and other interested parties on notice. Locate and communicate with potential beneficiaries. Pay the expenses of the decedent. Pay the debts of the decedent. File tax returns, such as form such as 1040, 1041, 706, and 709 and make tax payments. Distribute assets to beneficiaries according to the will or the laws of intestacy. Report tax basis of assets to IRS.
What is pay on death and transfer on death accounts?
Pay on death and tod accounts are bank or investment accounts with listed beneficiaries. Because the accounts have listed beneficiaries, the assets within the account transfer by virtue of contract law and do not pass through probate.
Identify assets that pass outside of probate by contract law.
Assets that transfer by contract are assets with listed name beneficiaries other than the decedent. The following assets transfer by contract: life insurance, pension plans, IRA, annuities, pay on death accounts, and transfer on death accounts.
Identify assets that pass outside of probate by titling or trust law
The following assets transfer by trust or titling law: joint tenancy with right of survivorship, tenancy by the entirety, and all trust accounts.
