You’ve probably heard horror stories about the nightmare that is probate court. Undoubtedly, friends and neighbors have had to undergo the probate process…and chances are, they don’t have many good things to say about it.
Let us first say, probate isn’t quite as bad as it gets made out to be (though it certainly CAN be for the ill-prepared). Probate is the legal process that authenticates your will in order to properly facilitate the allocation of your assets to your beneficiaries. Upon death, the estate administration process begins, drawing together all the necessary documentation for the distribution and management of your assets, which the probate court then oversees. The most common document utilized is a will.
If an individual passes away without a will—also known as dying ‘intestate’—the estate administration process becomes much more complicated, and a time-consuming, costly probate process is almost inevitable.
Being proactive and drafting a will, as well as understanding which assets must go through probate, can make the probate process much easier, or bypass it altogether.
Which Assets Need to Be Probated?
Whether or not your assets end up in probate is dependent upon how your estate plan is set up. Essentially, any property that does not have a designated beneficiary, or is not set up to pass by operation of law, will inevitably be deemed probate property, and settled in probate court. Some examples of circumstances that lead to probate include:
- When an individual dies without a will. Without a will present, the estate becomes dependent upon the laws of intestacy, leaving the probate court to adjudicate who will inherit the deceased’s assets.
- When a person passes away as the single-named owner of titled assets. These assets include items like real estate, investment and bank accounts, vehicles, personal property, collectibles, safety deposit box contents, and other solely titled assets of the deceased.
- When property does not have a title. If the deceased does not have the compulsory paperwork for assets in their ownership, and the property isn’t clearly named in the will with the deceased’s wishes, the assets become probate property.
- When the beneficiary predeceases the testator. If your will hasn’t been updated before your named beneficiary passes away, their inheritance will be settled in probate.
Actions You Can Take Now To Avoid Your Assets Being Probated in the Future
As you can see, there are many factors that could land your estate in probate court; however, there are some things you can do now to make a more ironclad estate plan that is specifically designed to keep your assets out of probate, or at least simplify the probate process.
- Ensure your will is detailed. While having a will isn’t enough to avoid probate (all wills must go through probate), when a will clearly defines your wishes, it simplifies the process, and makes authorization to distribute your property much less laborious.
- Establish a living trust. A living trust prevents probate because the trust takes ownership of the assets placed within it and, upon your passing, a named trustee will distribute your estate as stipulated in the trust – without the need/input of the probate court.
- Title property jointly. Property owned in joint ownership with right of survivorship automatically passes the property to the surviving owner(s), without probate.
- Name a beneficiary. Assets that have a named beneficiary—for example, your retirement plan, life insurance policy, or transfer-on-death or payable-on-death bank accounts—escape probate by sending items directly to beneficiaries.
- Give assets away while you’re still alive. Although this is a no-brainer, it deserves an honorable mention. Simply put, if the property is no longer owned by you at the time of death, it doesn’t go to probate. This, however, can cause issues with qualifying for Medicaid if long-term care is needed, so we encourage you to speak with an elder law attorney before giving away money or assets.
At Miller Estate and Elder Law, we pride ourselves on providing clients with a high level of attention to detail that takes all of the guesswork out of estate planning. We create tailored solutions that are based on your specific goals and objectives. Our educational resources and unique programs keep you and your estate plan up-to-date, giving you the confidence needed to be secure in knowing your estate is in good hands.
Contact us today, register for a free workshop, or browse our resources, which address many common questions. With our guidance, you’ll gain peace of mind knowing your estate will be ready for smooth sailing after you’re gone.
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