Chapter 4: The Probate Process Flashcards
Ademption
Extinction of a legacy because an asset, specifically bequeathed to a legatee, has been disposed of prior to death.
Abatement
The reduction in assets transferring to a legatee because the estate has insufficient assets to satisfy all of the legatees.
Administrator
A person, usually a relative of the deceased, appointed by the probate court to oversee the probate process when an executor has not been named.
Ancillary Probate
Concurrent second probate process conducted in a non-domiciliary state in which the decedent wins property, which often requires the services of an attorney from that state, and separate court fees.
Domicile
Where a person lives, the location of their home.
Estate Administration or Succession
The passing of property at death to surviving heirs/legatees.
Executor
Estate representative designated in the will by the decedent. And executor may serve without bond if the bond is waived by the decedent.
Heir
One who inherits under state law.
In Trust For (ITF) Accounts
A bank account utilizing a beneficiary designation.
Legatee
One who inherits under the will.
Letters of Administration
A legal document that affirms the power of the administrator to act as the agent of the probate court.
Letters Testamentary
A legal document that affirms the power of the executor to act as the agent of the probate court.
Pay-on-Death Bank Account (POD)
A bank account utilizing a beneficiary designation.
Probate process
The legal proceeding that serves to prove the validity of existing wills, supervise the orderly distribution of decedents assets to the heirs, and protect creditors by ensuring that valid debts of the estate are paid.
Situs
The place, generally referring to the state, where property is located.
Surety bond
A bond posted by the administrator or the executor of the estate to protect creditors, heirs, and legatee from kisses created by the administrator or executor.
Totten Trust
Not a trust, but rather a bank account with a beneficiary clause.
Transfer-on-Death Account (TOD)
An investment account utilizing a beneficiary designation.
What are some advantages of probate?
Protect the decedent
Protect the legatees and heirs
Protect the creditors
- Implements disposition objectives of testator
- Provides for an orderly administration of assets
- Provides clean title to heirs or legatees
- Increases the chance that parties of interest have notice or proceedings and, therefore, a right to be heard
- Protects creditors by insuring that debts of the decedent are paid
What are some disadvantages of probate?
The time cost (delays) Monetary cost (costs) Privacy (publicity)
- Can be complex and excruciatingly slow – delays
- Can result in substantial monetary costs – costs
- The process is open to public scrutiny – publicity
What is the state contract law?
Transfer that avoid probate by contract allow the client to select a designated beneficiary to whom the property will be transferred; receives the title directly at death of owner.
– life insurance
– annuities
– IRAs, SEPs, SIMPLEs, and Qualified Retirement Plans
– Totten Trusts, POD accounts, and TOD accounts
What is the state titling law?
Property held as JTWROS or as Tenancy by Entirety pass outside the probate process because of the automatic survivorship feature (automatic retitling).
What is the state trust law?
All trust property passes outside of the probate process per state trust law. Property in trust has already been retitled because when the grantor of the trust transferred the property into the trust, it had to be retitled as trust property.
