Probate can often be a time-consuming and expensive process, causing additional stress and burden to grieving families in India. However, there are strategies you can implement to avoid the pain of probate. This blog explores essential strategies to simplify estate distribution and protect your assets. By creating a living trust, developing a business plan, naming beneficiaries on retirement accounts, and avoiding reliance on a last will, you can ensure a smoother transition of your assets while minimizing delays, costs, and potential conflicts.
What is Probate?
Probate is the legal process that involves the handling of the estate of a recently deceased person. The role of the court is to make sure that the debts are paid and the assets are distributed to the correct beneficiaries, according to the decedent’s wishes as detailed in a will.
The probate process is multifaceted in that it refers to the overall legal process of dealing with a deceased person’s assets and debt. The court facilitates the process and oversees the distribution of assets.
When is Probate Necessary?
In India, probate is not always necessary, and it depends on the state laws and the value of the estate. According to the Indian Succession Act, 1925, a probate is mandatory when a will is made in a place which was under the rule of the Lieutenant-Governor of Bengal or within the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature at Madras and Bombay. Probate is also compulsory in certain jurisdictions if a person resides in Mumbai, Chennai, or Kolkata or has property in these jurisdictions.
Generally, a probate is advisable in all cases and is necessary in cases of will dealing with immovable property. However, if there is no dispute regarding the will, it is not necessary to go through probate. The Indian Succession Act, of 1925 has no provision making it compulsory to take a probate order in case of an unregistered will
What Has to Go Through Probate Court?
In a probate case, an executor (if there is a will) or an administrator (if there is no will) is appointed by the court as a personal representative to collect the assets, pay the debts and expenses, and then distribute the remainder of the estate to the beneficiaries (those who have the legal right to inherit). The following assets typically go through probate court:
- Assets owned solely by the deceased person, such as real estate, bank accounts, and investments
- Assets owned by the deceased person as a tenant in common, which means that they own a share of the asset with another person who is not their spouse.
What Does Not Have to Go Through Probate Court?
In some countries, the following assets are not required to go through the probate court. Here are some common examples:
- If a particular asset (like a retirement plan, life insurance policy, or a bank account) already has a named beneficiary, that asset goes to the beneficiary (or beneficiaries, if there are more than one) without going to court
- Assets owned jointly with another person, such as a house owned by a married couple or a joint bank account, automatically pass to the surviving owner without going through probate.
What is the Probate Process?
The probate process is the legal process of transferring the assets of a deceased person to their beneficiaries. The probate process typically involves the following steps:
1. Death Certificate
The first step in the probate process is to obtain a death certificate from the government agency that issued the deceased person’s birth certificate.
2. Have the Will Validated
If the deceased person had a will, it must be validated by the probate court. This involves submitting the will to the court and proving that it is the valid will of the deceased person.
3. Select Someone to Conduct Probate
The probate court will appoint someone to conduct the probate process. This person is typically called the executor or administrator of the estate.
4. Post a Bond
The executor or administrator of the estate may be required to post a bond. This is a guarantee that they will carry out the probate process per the law.
5. Inform Beneficiaries and Creditors
The executor or administrator of the estate must inform the beneficiaries and creditors of the deceased person of the death.
6. Determine Value of Assets/Property
The executor or administrator of the estate must determine the value of the assets and property of the deceased person.
7. Pay All Fees and Debts of the Deceased
The executor or administrator of the estate must pay all of the fees and debts of the deceased person.
8. Distribute Remaining Assets
Once all of the fees and debts have been paid, the remaining assets of the deceased person are distributed to the beneficiaries.
How to Avoid Probate?
There are a few ways to avoid probate in India:
- Hold assets in joint tenancy with right of survivorship: This means that when one joint tenant dies, the surviving joint tenant automatically becomes the owner of the asset.
- Create a trust: A trust is a legal arrangement that allows you to control how your assets are distributed after your death. Assets held in a trust do not go through probate.
- Designate a beneficiary for your bank accounts: This means that when you die, the funds in your bank accounts will be transferred directly to the beneficiary you have designated.
It is important to speak with an attorney to discuss your specific situation and to determine the best way to avoid probate in India.
FAQs on Probate Process
What is the limitation of probate of will?
The main cons of probate of will are: Time-consuming: The probate process can take several months or even years to complete. Costly: The probate process can be costly, especially if there are any legal challenges. Public: The probate process is a public process, which means that anyone can view the will and the probate records.
How Much Does Probate Cost?
The cost of probate in India varies depending on the value of the estate and the complexity of the case. However, the basic cost of probate is typically around Rs. 10,000. This cost includes the court fees, the lawyer's fees, and the cost of publishing the notice of probate. The following are some of the factors that can affect the cost of probate: The size of the estate: The larger the estate, the more likely it is that probate will be costly. The complexity of the case: If the case is complex, such as if there are any challenges to the will, the cost of probate will likely be higher. The location of the probate: The cost of probate can vary depending on the location of the probate court.
Where is probate not necessary?
No probate is necessary in the case of wills by Muhammadans.
How can I avoid probate in India?
One way to avoid probate is to have a living trust. A living trust is a trust that is created while the person is still alive. When the person dies, the assets in the trust are distributed to the beneficiaries of the trust without the need for probate.
