Do All Wills Need to Go Through Probate?

The aftermath of losing a loved one is emotionally challenging and made even more complex by the probate process. Not all wills need to go through probate, but knowing how and when to avoid the process can be tricky.

Probate is the legal procedure that deals with the assets and debts left behind. This article will unpack the truth about probate, its processes, and potential exceptions.

Key takeaways of probate court

• Probate entails a legal process overseen by a court to validate wills, appoint executors, and ensure proper distribution of a deceased person’s assets, which can be complex and costly depending on the estate and any disputes.
• Wills do not always require probate; smaller estates and those with extensive planning might avoid the process. State laws, joint ownership, beneficiary designations, and living trusts can allow assets to bypass probate.
• State laws heavily dictate the probate process, including asset distribution, executor duties, and intestate succession, while probate alternatives for different assets and legal representation can streamline or negate probate proceedings.

Understanding the probate process

Probate refers to the legal procedure that deals with the estate of a deceased person. This process starts with the executor named in the will or an administrator when no will exists, and it encompasses several steps overseen by the probate court. The court’s responsibilities include:

• Validating the will
• Appointing the executor
• Providing them with the legal power to distribute assets and settle any remaining liabilities such as funeral expenses, medical bills, taxes, and other debts

Yet, probate isn’t free. The costs can be quite substantial, depending on the complexity of the estate and potential disputes over the will. These costs encompass:

• Court fees
• Potential probate attorney fees
• Expenses for filing notices to creditors
• Probate court judge overseeing the entire process

The role of probate courts

Probate courts' responsibilities go beyond mere validation of a will. After confirming a will’s authenticity, the probate judge and court:

1. Appoints a representative, typically the executor named in the will
2. Issues testamentary letters to the executor, giving them authority to manage the estate’s assets
3. The executor takes charge of managing the estate’s assets and distributing them as per the will’s instructions

When disputes arise, probate courts will open a dialogue with the parties involved to understand the causes of disputes, and come to a resolution. In some cases, the courts may use a mediation process to resolve disputes.

Executor's responsibilities in probate proceedings

The executor, or personal or legal representative, of the will has a significant role in the probate process. They are responsible for:

• Overseeing all legal claims against the estate
• Settling debts
• Managing estate assets
• Paying taxes
• Distributing the estate to beneficiaries in accordance with the will

If the debts surpass the assets, the probate process may not proceed due to the estate being deemed insolvent.

After taking stock of the estate, evaluating all the assets' value, and settling remaining debts, the executor seeks court approval to distribute the leftover estate to the beneficiaries. The executor is also tasked with managing claims submitted by creditors within a year following the deceased’s demise.

When probate becomes necessary

Probate becomes necessary in situations where there is no will, if it is a complex estate with a lot of assets or property, or if the will is contested. Real estate owned by the deceased person, for example, necessitates a probate proceeding for its transfer.

However, the necessity of probate isn’t solely determined by the presence or absence of a will. Other factors, such as the size of the estate at the time of death, the laws of the state, and the availability of an executor to administer the estate, also influence the requirement for probate.

Not all wills require probate: Understanding exceptions

Many people believe that all wills must go through probate, but this is not the case. Some estates can sidestep probate depending on factors like state laws, the size of the decedent's estate, and the extent of the decedent's estate planning. A well-drafted will and detailed estate planning can help a family avoid probate or lessen the steps involved in the process.

Estate planning tools to avoid probate

Utilizing estate planning tools can help in avoiding the probate process. Estate planning instruments such as joint ownership, beneficiary designations, and living trusts can be utilized to circumvent probate. Joint ownership, particularly in the form of joint tenancy, aids in the avoidance of probate by facilitating the automatic transfer of the property to the surviving owner(s) upon the death of one owner.

Establishing a living trust involves multiple steps, from gathering asset information to transferring asset ownership into the trust. Conversely, beneficiary designations offer a straightforward way to transfer assets after death and evade probate. Designating a person dies a beneficiary for accounts like insurance policies, retirement accounts, and bank accounts enables these assets to be directly passed on to the designated beneficiary, eliminating the need for probate.

Small estates and simplified probate processes

Small estates often don’t require the full probate process. They typically encompass filing a petition with the court. The value limit for what is considered a small estate varies by state. For instance, in Oklahoma, estates valued under $20,000 do not require the expedited probate process, whereas in California, the threshold is under $184,500.

Many states offer simplified probate procedures for smaller estates, but the accessibility of these procedures can vary by state. If an estate is small enough to skip the probate process, the estate’s assets may be claimed through other legal actions, such as an affidavit.

The impact of state probate laws

State laws significantly influence the probate process. Each state has its unique set of laws and regulations related to estate planning and probate. These laws offer comprehensive guidelines and regulations encompassing:

• Procedures
• Timelines
• The validity of wills
• Asset distribution
• The duties of the executor

Even in cases where an individual resides in one state but owns property in another, the probate laws of the state where the property is located govern that property, irrespective of the deceased individual’s state of residency. State laws also establish the regulations for intestate succession, which determine the allocation of assets in the event of an individual’s passing without a valid will.

How state laws influence probate requirements

State laws dictate the prerequisites for probate. These specific prerequisites differ by state. For instance, in Texas, the probate value threshold is set at $50,000. They also impact estate distribution during probate by establishing guidelines and regulations for the court-supervised process of distributing a decedent’s property.

Intestate succession is governed by state laws, and each state has its own probate will and specific laws that dictate the distribution of property when an individual passes away without a will. Differences in probate requirements stem from various factors, including:

• Whether a state adheres to common or community property law
• The relationship of the deceased to their surviving family members
• The presence of a surviving spouse or children
• The value of the estate

It's important to consult the laws of your specific state to understand how intestate succession would apply in your situation.

Intestate succession and probate court

Intestate succession refers to the order of priority in which an individual’s heirs will receive their property, as established by the intestacy laws of the intestate estates of the respective state. The probate court evaluates the assets that need to be distributed, and the intestacy laws govern how the assets are allocated among legal heirs.

Intestate succession laws may differ from state to state; however, in general, if an individual has both a spouse and children, the spouse is entitled to inherit the initial $50,000 of the property subject to intestacy regulations, as well as half of the remaining property. In the absence of a spouse or children, the property is passed on to the closest surviving relatives of the deceased.

Different types of assets might have different probate requirements or alternatives. Typical categories of assets that commonly bypass probate include:

• Life insurance policies
• IRAs
• 401(k)
• Pensions
• Bank accounts with beneficiaries

Non-probate assets are not subject to probate court and can be transferred directly and automatically to their beneficiaries without the need for a probate court process or intervention.

Certain categories of jointly-held property are subject to probate proceedings, whereas others may be transferred to the surviving partner or co-owner without the need for probate. However, if the last co-owner passes away, the jointly-owned asset may be subject to probate unless alternative measures, such as a trust, have been established.

Probate proceedings can include a range of assets, such as real estate, artwork, vehicles, bank accounts, personal property, and other investments. These remaining assets will be dealt with according to the probate laws and the legal process involved in the state's probate laws and court proceeding matters.

Assets that typically bypass probate

Assets with designated beneficiaries that commonly bypass probate encompass:

• Insurance policies
• Retirement accounts like IRAs
• Bank accounts with payable-on-death designations
• Transfer-on-death securities

These assets can be directly transferred to their specified beneficiaries without the necessity for probate proceedings.

In certain forms of joint ownership, such as tenancy by the entirety or joint tenancy with the right of survivorship, when one co-owner passes away, the asset automatically transfers to the surviving co-owners, bypassing probate.

A living trust is another tool that enables an individual to transfer their assets into a trust while alive and designate a trustee to oversee the assets in accordance with the individual’s directives following their passing.

Handling non-probate assets

Non-probate assets, such as life insurance policies and retirement accounts, can be distributed without probate. Upon the policy holder’s death, beneficiaries become eligible to receive the life insurance proceeds. To initiate the claim process, the insurance company must be notified and presented with a copy of the death certificate.

Beneficiaries of retirement accounts are required to comply with the mandated minimum distribution regulations. These distributions, resulting from the demise of the account holder, are expected to be completed within a period of 10 years following the original owner’s passing.

Navigating probate with a probate attorney

A probate attorney can greatly simplify the probate process. Their duties involve:

• Managing the estate administration process after an individual’s death
• Drafting required legal documents for the probate court
• Guiding the executor or beneficiaries throughout the probate proceedings
• Identifying the deceased individual’s assets.

A probate attorney can also contribute to reducing expenses in the probate process by providing assistance with responsible and estate tax planning and devising an appropriate estate plan to lower the expenses associated with probate or potentially circumvent it altogether.

The benefits of legal representation

Legal representation during probate proceedings provides numerous advantages, including:

• Expediting access to the estate
• Mitigating familial conflicts
• Safeguarding the estate from legal claims
• Ensuring comprehensive management of all necessary steps
• Averting rejection of the will
• Notably reducing stress and potential disputes

Probate attorneys offer key guidance and legal expertise, including:

• Validation of wills
• Appointment of executors
• Consideration of the deceased’s wishes
• Competent handling of estate asset collection and liquidation
• Dealing with estates and trusts with multiple assets
• Navigating probate litigation for inheritance rights for children born outside marriage
• Managing situations involving will contests, estate, and trust administration, as well as guardianships and conservatorships

Reducing probate costs and time

Effective estate planning can contribute to reducing probate costs by either avoiding probate or minimizing the necessity for probate. This can be achieved through strategies such as establishing a revocable living trust, assigning beneficiaries for assets, and transferring assets as gifts during one’s lifetime, thereby circumventing the probate process and its related expenses.

Probate attorneys can put in place measures to speed up the probate process by:

• Gaining a thorough understanding of the process
• Collecting detailed information about the estate in advance
• Engaging a probate attorney early in the process
• Consulting with an attorney about the case
• Swiftly filing the probate petition
• Streamlining the process through effective legal strategies

Summary

While probate is a common and often necessary process following a person’s death, it’s not always a requirement. Certain circumstances, such as state laws, the size of the estate, meticulous estate planning, and the type of assets involved, can influence whether a will has to go through probate. Having a probate attorney can be beneficial in navigating the probate process, reducing costs, and ensuring the efficient management of the deceased person’s estate.

Frequently asked questions

How do you get around probate?

To avoid probate, you can consider options such as establishing a revocable living trust, gifting assets to loved ones while alive, or keeping your estate small. These methods can help bypass the probate process and ensure a smoother transfer of assets.

Which of the following items will pass through probate?

Assets titled in the decedent's sole name, assets owned but not jointly owned, not payable-on-death, and without beneficiary designations or left out of a living trust, are subject to probate. This can include bank or investment accounts, as well as stocks and bonds.

What is a child entitled to when a parent dies without a will?

If a parent dies without making a will, finding out what their child will inherit is complex. Surviving spouses are usually the first to inherit, followed by children, but intestate succession laws vary by state. 

What is the purpose of probate?

Probate serves as the formal legal process that validates a will and assigns an executor to manage the estate and distribute assets to beneficiaries. This recognition helps ensure that the deceased's wishes are carried out appropriately without leaving room for confusion or disputes.

What is probate, and who initiates it?

Probate is the formal legal process of dealing with the estate of a deceased person, and it is initiated by the executor named in the will or an administrator if no will exists.