The word probate might be familiar to you, and you may know that you want to avoid it, but you don’t know how or why. You might be wondering if there is a minimum amount of assets that necessitate probate, will having a will help you avoid probate?
Probate is a legal process that occurs after someone dies. This process is court overseen. It could include multiple steps, court appearances, and attorneys.
The Steps to Probate:
- Providing in court that the decedent’s will is valid
- Identifying and inventorying the decedent’s property
- The property includes real estate and personal items like jewelry
- Property appraised to determine estate value
- Outstanding taxes and debts will be paid
- The remaining property will be distributed according to the will or state law.
The basic requirements of a will are essential to keep in mind when going through probate. Your will must be in writing, signed and dated by the person who made it and signed by witnesses. You have no responsibility to investigate the circumstances of the will’s signing unless someone suggests that there is a problem.
These steps will involve substantial paperwork, four appearances, and lawyers. Probate is to ensure the debts are paid and assets go to the correct beneficiaries. Probate also allows for the transfer of the estate to beneficiaries. It serves as a receipt for the property’s new owner to show that they are the legal owner and can sell, loan, or rent the property.
The size of your estate will not determine if probate will happen. No matter the total value, an estate must go through probate unless planning techniques are utilized. However, some states have different types of probate based on the full value of the estate.
A will alone will not help avoid probate. The will tells the probate judge the wishes of the deceased and to who the estate should go too. A probate judge must determine that the will is valid. A will must also be in probate in the county where the decedent was living at the time of their death. Sometimes the named executor does not live in the same county as the decedent. In cases like this, most probate courts have measures in place to help with this circumstance.
There are two options for avoiding probate. One is creating a revocable living trust. The other is having a will but utilizing beneficiary designations on all the assets in a person’s estate. Both of these options can help you avoid probate.
A revocable living trust allows a person to transfer assets into a trust. The transfer of assets is done through a process called funding the trust. Once assets have been placed in a trust, they will be outside the probate process. The reason is that they are now governed by the guidelines in the thrust and not a will. Now your assets that have been funded to the trust pass through the trust to your beneficiaries without any court interference or probate. A revocable living trust is often considered a more straightforward and faster process.
Utilizing beneficiary designations on assets. Many of your assets, such as bank accounts, retirement accounts, and some personal property, can have a beneficiary designation. Often these beneficiary designations are described as payable-on-death or transfer-on-death. Both of these things have the same end result. With this method, the only thing needed to access funds is a death certificate. Depending on the type of asset, some follow-up information and then the title are passed to the beneficiary. Beneficiary designations can be used to avoid probate.