Last Wills and Probate Court
Probate is the legal process through which the court decides how your property will be divided. If you have a last will, the court will review that document to determine your wishes and will follow those wishes unless the last will is successfully contested by your heirs. If you do not have a last will, the court will assign someone to manage your estate and its distribution.
Some people think that having a last will allows them to avoid probate. This is not true. A last will is used in probate to determine who receives what property, who is appointed as guardian to any minor children, and who will be responsible for carrying out the last will's requirements. Probate will not be required in many states if the value of the estate is less than $50,000. However, if a last will includes real estate or provides for minor children, a formal probate action is generally required.
Probate can become very expensive. For example, if you die without a last will, the court will appoint an administrator. The administrator will inventory and collect your property, pay any debts and taxes owed, and distribute any remaining property according to the laws of your state. Each of these steps takes time and money, and the expenses will be reimbursed out of your estate. In addition, the court may approve hefty fees (sometimes between 5-15% of the total value of your property) to fund the probate process.
If you are looking to avoid probate entirely, you may want to explore other estate-planning devices. Some common devices used to avoid probate are joint tenancies, pay-on-death accounts, and living trusts.