The probate process is an important issue in estate planning and it comes up a lot. Information about the probate process is important to understanding some of the details of estate planning and helping you make decisions.
Probate is the legal process where the court or a judge validates your will and other legal documents connected to your estate. All wills are required to go through the probate process, with one exception. A joint will does not usually go through probate after the first spouse dies.
The process takes place in the Probate Court (Surrogate’s Court, Orphan’s Court or Chancery Court in some states) that has jurisdiction in the place where you live, with one exception. Assets in different states, typically real estate, must go through the probate process in that state.
The probate process may vary from state to state, including how soon the executor can file and how long they can wait before they are unable to file.
Depending on the size and complexity of your estate, the probate process can be time-consuming and expensive — up to 10% of your estate.
Not everything in your estate needs to go through the probate process.It is important to be aware that all court proceedings will become part of the Public Record, so others will be able to see the content of your will and any trust in your name or created in your will.
The process begins after your death with your executor, an heir/beneficiary, or legal representative (administrator) appointed by a judge if you die without a will filing a petition for probate with the probate court along with a copy of your will.
The court will need to validate your will or applicable trust before any further steps are taken, so it’s crucial to make sure they are correct. If your will or trust is validated, the probate court will issue an order appointing someone to represent the estate, usually your executor or personal representative.
The court will then schedule and give notice of the court hearing to all of your heirs and beneficiaries. This will be published in a local newspaper to notify others of the time of the proceeding. After this, the process usually involves supervising your executor to ensure that they carry out the wishes specified in the will, personal trust, and/or trusts created in your will. The tasks will take place in the following order.
For more details see Tasks of the Executor.
This may or may not require an appearance in court, depending on the size and complexity of your estate.
The probate court will also attempt to resolve any challenges to the will.
If your will is not validated, the probate process will proceed as if you had no will, beginning with designating an administrator to manage your estate. A relative or friend can request to be named as the administrator.
If you are concerned about the details of your estate getting out or saving your executor and beneficiaries time and money, there may be ways to protect some or all of your assets from the probate process.
Whether or not it is necessary for property and other assets to go through the probate process usually depends on who will be the official owner of the asset at the time of your death. The official owner of property is the person whose name is on the title. However, probate will be necessary for property without titles and for certain designated beneficiaries that cannot own property. If the title and ownership is immediately transferred to an independent adult beneficiary such as with a trust, joint ownership, or other transfer on death document, you are not considered the owner by the probate court.
Not all of your assets are subject to the probate process and can pass directly to beneficiaries. Typically these assets will not be listed in your will, since each has its own document. It is best to store these documents with your will and other important paperwork. As with most other rules, check your specific state information to see which of these may or may not be allowed.
Other than direct gifts, there are other ways to prevent your assets from going through the probate process.
A trust is a fiduciary (financial) relationship where a trustee holds title to and manages your property or assets for the benefit of a third party, your heirs or other beneficiaries.
When you designate that an asset will automatically transfer to someone else at your death, it is not your personal asset and will bypass the probate process. This includes things such as:
All you usually need to do is request and fill out the payable on death forms available from your brokerage company or bank.
Property held jointly with a rights of survivorship designates that the property will go to the surviving owner upon your death and therefore avoid probate. This may include Joint Tenancy with Rights of Survivorship, Tenant by the Entirety, and Community Property. Some only apply to spouses.
Many assets can be converted to a type that does not involve probate court by simply naming another person as the designated beneficiary.
Assets to consider converting to avoid the probate process include:
You can choose whether or not your assets will be subject to the probate process.To do so you need to understand the advantages and disadvantages and how they might apply to you.
Since the court is not involved, your trust settlement does not become part of the Public Record, so others will not see the terms of the trust.
Your wishes cannot be contested if there is no will or probate court to oversee the distribution of your estate.
Although it can be expensive and take a large amount of time and effort to set up and maintain a trust, there are many reasons you would consider doing this — especially if you have a large and/or complicated estate.
Even if your estate is under a certain dollar threshold, avoiding the probate process may still have financial benefits.
When the probate process is short and simple as with most small estates in most states, probate proceedings may have some benefit.