You’ve heard that you should avoid probate, but why should you? Here are the fundamentals.
Questions
What is probate?
How does the probate procedure work?
Is it necessary for all property to go through probate when a person dies?
Who is responsible for conducting probate?
Should I make any plans to avoid probate?
What exactly is probate?
Probate is a legal procedure that occurs after someone dies. It includes the following:
proving in court that a deceased person’s will is valid (usually a routine matter), identifying and inventorying the deceased person’s property, having the property appraised, paying debts and taxes, and distributing the remaining property in accordance with the will (or state law, if no will exists).
Probate usually entails paperwork and court appearances by attorneys. The estate property is used to pay the attorneys and court expenses, which would otherwise go to the persons who inherit the dead person’s property.
What is the probate procedure?
After your death, the person designated in your will as executor—or, if you die without a will, the person chosen by a judge—files paperwork in the local probate court. The executor establishes the legality of your will and provides the court with listings of your property, debts, and who will receive what you’ve left. Then, your family and creditors are told formally of your death.
During the probate procedure, which often lasts a few months to a year, your executor must locate, safeguard, and manage your assets. The executor may have to sell your real estate, stocks, or other property depending on the provisions of your will and the amount of your obligations. For example, if your will includes many monetary bequests but your estate mostly comprises of priceless artwork, your collection may need to be assessed and sold to generate revenue. If you have a lot of debts, your executor may have to sell part of your property to pay them off. (Learn more about the probate procedure from the perspective of the executor.)
In most jurisdictions, immediate family members may petition the court for the release of short-term support payments while the probate process is ongoing. The court will finally award your executor permission to pay your bills and taxes and distribute the remainder to the persons or organizations mentioned in your will. Finally, the ownership of your property will be transferred to the new owners.
Is it necessary for all property to go through probate when a person dies?
No, most states allow a certain amount of property to pass without probate or through a reduced probate process. In California, for example, you may convey up to $100,000 in property without probate, and any property left to a surviving spouse is transferred in a straightforward manner.
Furthermore, property that transfers outside of your will, such as via shared tenancy or a living trust, is exempt from probate. See How to Avoid Probate for an overview of the most prominent probate-avoidance approaches.
Who is in charge of processing probate?
In most cases, the executor appointed in the will takes on this role. If there is no will or if the will does not designate an executor, the probate court appoints someone (known as an administrator) to oversee the procedure. The task is usually given to the closest competent relative or the person who inherits the majority of the dead individual’s possessions.
The court does not appoint an estate administrator if no formal probate process is required. An informal estate representative is instead appointed by a close family or acquaintance. Typically, this person is chosen by family and friends, and it is not unusual for multiple persons to share the obligations of settling bills, filing a final income tax return, and distributing property to those who are entitled to it.
See Probate Shortcuts in Your State and Avoiding Probate in Your State for further information on the probate procedure in your state.
Should I make any plans to avoid probate?
Probate seldom helps your beneficiaries and is usually costly and time-consuming for them. Probate is only necessary if your estate will have serious issues, such as several debts that cannot be readily paid from the property you leave.
The decision to invest time and effort arranging to avoid probate is influenced by a variety of circumstances, the most important of which are your age, health, and money. Adopting a comprehensive probate-avoidance strategy today, if you’re young and in excellent health, may mean you’ll have to redo it if your life circumstances change. Furthermore, if you have little property, you may not want to waste time arranging to avoid probate since your property may qualify for your state’s expedited probate process.