Do All Wills Need to Go Through Probate?

Can’t You Skip Probate?

Some people insist on not probating a will. There is no requirement that a will or property go through probate. Still, if the decedent owned property that was not explicitly arranged to avoid probate, there is no way for the beneficiaries to obtain legal ownership without it.

What Is a Small Estate Probate Process?

You may not need to experience probate court to obtain title to property belonging to a dead person. Figuring out if probate court is necessary depends on a plethora of issues, like the amount of money involved, the type of property involved, and who is claiming the property.

One of the ways to decide if you can use a simplified procedure to transfer property is to figure out whether any of the assets have named beneficiaries. That means that the decedent, when alive, named one or more people as beneficiaries to receive the asset when they died. Accordingly, listed were some examples earlier, but here are some common ones:

• Life insurance proceeds,

• Retirement accounts, pensions, or annuities

• Bank accounts

• Property in a living trust

Another meaningful way is to figure out how the property is owned (the type of title ownership).
For example:

• Was the property owned in joint tenancy? If so, the surviving owner retains the entire property.

• Was the property community property with the right of survivorship? If so, the surviving spouse or partner would likely acquire the entire asset.

• Nonetheless, complications arise. If the asset was community property, but there was no explicit right of survivorship, the decedent’s spouse or partner may receive the decedent’s half. Still, it will depend on whether there is a will and the property was divided in other ways. It may also be necessary to make sure that the property is, in fact, community property and was not somehow changed to separate property through an agreement or in some other way. You may need to talk to a lawyer to sort out these questions.

• Did different people own the bank account? Or was it to be transferred to one person upon death?

Benefits like social security survivor benefits or benefits as a dependent of a deceased veteran can usually be collected without probate court.

It can be challenging to determine whether you can use a simplified informal process to transfer property. In addition to assets with a designated beneficiary (like life insurance or a bank account), estates with a value of $166,250 or less may qualify for a non-formal probate case. Also, if you were married to or in a registered domestic partnership with the decedent, you may be able to follow a simple process to have your property rights determined. Click on the items below for more information on these situations.

Check with Steve Bliss a local Estate Planning attorney in your area to find out the laws surrounding wills and probate.

Jointly Held Assets: It’s relatively common to hold property jointly. Upon your passing, if you have assets titled in joint names with rights of survivorship – with either your spouse, children, business partner, or anyone else – the property would immediately transfer to the surviving owner. The caveat here is that if both owners pass away at the same time, or if the surviving owner also passes away without adding another joint owner to the title, at that point, probate would become necessary.

Property in a Revocable Living Trust: If you have a Revocable Living Trust that holds assets, anything inside that Trust will not experience probate. Living Trusts avoid probate entirely. Instead, they include a Terms of Trust Agreement that allows assets to transfer directly to beneficiaries without any probate.

It’s not uncommon to create what’s known as a “Pour-Over Will,” which is a safeguard to catch any assets you may not put in your Living Trust. The Pour-Over Will automatically transfers assets to the Trust upon your death. Note that in this case, probate would be required.

Property with Named Beneficiaries: Designating beneficiaries, or creating Payable on Death (POD) or Transfer on Death (TOD) accounts, also allows you to avoid probate. Any account or policy with a named beneficiary would pass through automatically after your death.

The probate process can be lengthy and complicated, especially during a time of grief. If this is something you wish to avoid, consider retaining counsel from the passionate probate attorney at Steve Bliss Law. They offer unparalleled support and guidance to simplify the probate process.

Frequently Asked Questions About Wills Going Through Probate

Understanding what does and doesn’t transfer through probate can be confusing. Below, we break down some of the common questions people tend to have when wrapping their heads around this Probate concept.

When Does a Will Go Through Probate?

After you die, your Will goes through probate to ensure every aspect is followed out per your instructions and wishes. But probate also occurs if you die without a Will or other Estate Planning in place. Consequently, this is known as dying intestate. And yet another case when probate is necessary is if beneficiaries are improperly titled, refuse the inheritance, cannot be located, or are otherwise invalid, such as if a beneficiary passes away before you do.

When Does a Will Not Need to Go Through Probate?

With careful planning, you can set up an estate that avoids probate. Probate can be timely, costly, and stressful for your loved ones. In addition to these drawbacks, legal fees and estate tax can be drastically increased throughout the probate process. And the final plus to avoiding probate is the idea of privacy. Probate is a matter of public record, so if you want portions or all of your estate to remain private (including what assets transfer to whom), you might want to look into ways to avoid probate.

Conversely, you may be able to avoid probate through any of the following methods effectively:

Establishing and funding a Revocable Living Trust: Assets placed in your Living Trust can be used while you are alive, but when you die, they pass through to the Trust beneficiaries you’ve named without probate.

Designating beneficiaries on your life insurance policies: Ensuring your beneficiaries are up-to-date and still applicable can streamline and simplify the proceeds going directly to them without probate after you pass away.

Using retirement accounts that allow you to name a beneficiary and bypass probate – Simply naming a beneficiary on certain retirement accounts would transfer your account balance to that person upon your passing.

Titling real estate as joint tenants: Joint tenancy or joint tenants with the right of survivorship by definition, has two owners. When the first owner passes away, the survivor automatically owns the property.

What Happens If You Don’t Go Through Probate?

If you negligently fail to complete the probate process, creditors have the right to continue pursuing payments they believe the estate owes. Probate effectively closes out any debts an estate is responsible for. Failing to actively follow probate could result in you being held personally liable for any expenses.

How to Avoid Probate

It is possible to avoid probate entirely with careful planning. This is desirable for some people because doing so reduces legal fees and can avoid the estate tax, which can take a significant amount of an excessively wealthy estate. Avoiding probate can also protect privacy since some of the records may not be available to the public.

One of the eminently popular ways to avoid probate is using a revocable living trust. Assets are placed in the Trust, but the trust creator can use them during their lifetime. Upon death, assets in the Trust are passed to the trust beneficiaries just by operation of the trust document. No probate is necessary.

Life insurance policies pass property outside of probate. Whoever you name as beneficiary on your life insurance policy will receive the death benefit directly with no probate process.

Some retirement accounts can pass outside of probate. The account owner names a beneficiary, and that person then receives the account’s balance after the owner’s death. Payable on death accounts operate the same way.

Real estate that is owned as joint tenants or joint tenants by the entirety passes outside of probate. This type of property has two owners. The second owner automatically owns the property when the first owner passes away.

Families will have some contact with a probate court whether or not a will was created, but the process is streamlined and inexpensive in nearly all cases.

Nonetheless, probate can be messy and complicated, but it suddenly may seem less stressful when you understand the goal and the process. That said, there are many valid reasons for avoiding probate – from emotional reasons to financial ones – and if you want to set up your estate to largely (or entirely) avoid probate, know that there are ways to do so. Contact a Steve Bliss an achievable estate planning attorney today.