Avoiding Probate FAQ

No one can ever fully prepare to lose a loved one. It's challenging to deal with grief on the one hand and legal processes for another person's assets on the other. FindLaw hopes the following information offers practical support as you get oriented to the probate process.

In this article, we'll discuss the following topics:

• What is probate?
• Is avoiding probate possible through exemptions?
• Who manages the probate process?
• What happens during the probate process?
• What are some other ways to avoid probate?

What is probate?

Probate is a court-supervised process of distributing and overseeing property after a person dies. The purpose of probate is to:

• Determine the wishes of the deceased person
• Pay debts
• Distribute the assets and personal property according to the decedent's wishes

The probate process can involve court proceedings relating to the probate estate. Property passes through probate according to the will or by operation of law.

The following happens during probate:

• Determination of the executor or the appointment of a personal administrator
• Authentication of the will
• Identification and inventory of the decedent's property
• Identification of heirs and beneficiaries
• Payment of debts and taxes (including estate tax, gift tax, and inheritance tax)
• Distribution of property according to a will or according to state law of intestacy if the decedent died without a will

Many people consider avoiding probate in deciding on estate planning options.

Is avoiding probate possible through exemptions?

Yes. In some states, the law offers a way to avoid the probate court process. State law specifies a particular exemption amount for small estates. If the gross estate does not exceed the exemption limit, the estate can go through the simplified probate process. This process can use affidavits.

For example, small estates worth less than $184,500 escape the probate process in California. In a few states, if the property goes to the surviving spouse, there is a simplified or no probate.

Who manages the probate process?

An executor named in a will or a personal administrator appointed by a probate court oversees the probate process. The executor or personal administrator handles probate if avoiding probate isn't an option.

A probate judge appoints an administrator if there isn't a named executor or the decedent dies without a will. Usually, the administrator is a relative or the person inheriting most of the decedent's estate.

The executor or the administrator performs the following duties:

• Get the decedent's original will
• If necessary, hire a probate attorney
• Initiate and manage the probate process
• Cancel credit cards
• Notify government entities of the decedent's death
• Manage assets

The executor or personal administrator handles all these tasks. This is estate administration. In many situations, the executor oversees probate. This is a process of public record in the courts.

The executor of the will or a court-appointed administrator will handle probate and, if necessary, hire a probate attorney. When hired, a probate lawyer performs most of the work and gives legal advice.

If probate proceedings are unnecessary, the family chooses an informal estate representative. This person will pay debts and distribute the property. Usually, the estate representative is a family member or a close friend of the decedent.

What happens during the probate process?

Because probate involves court costs and attorney fees, avoiding probate will save time and money. The probate process usually takes between six months to a year. The executor or the administrator handles filing the appropriate paperwork with the probate court.

During probate, the following happens:

• The probate court receives a copy of the decedent's will
• The personal administrator identifies and inventories probate assets
• The personal administrator contacts the heirs
• The personal administrator pays beneficiaries, debts, and taxes

The distribution of probate assets is the last step in the probate process. In some situations, the executor may have to sell assets, such as real estate and securities, to pay outstanding debts or to make cash bequests specified by the will.

What are some other ways to avoid probate?

Probate is inapplicable if the property qualifies for a state's exemption or a simplified probate process. If an estate is subject to probate, there are some effective methods of avoiding probate through estate planning. An estate planning attorney can help during a person's lifetime.

Revocable Living Trust

Creating a living trust is one of the most popular ways of probate avoidance. The grantor, or the living owner, transfers title to the property to a trust. Typically, the grantor of the living trust is also the trustee. The trustee manages the property and retains control over the property until death. The successor trustee then transfers the property to the beneficiaries named in the trust.

Joint Tenancy and Tenancy by the Entirety

A joint tenancy allows people to own property equally as joint tenants. When one joint owner dies, the surviving owner automatically inherits the property through the right of survivorship. This form of joint ownership allows the property to transfer after the death to the joint owner by operation of law. The property does not go through the probate process.

Tenancy by the entirety is like a joint tenancy. But it only applies to married couples. Property can go to same-sex couples registered with the state in a few states. The owners share an interest in the property in a tenancy by the entirety. When one owner dies, the surviving owner automatically receives the entire interest in the property.

Naming a Beneficiary

An account owner can name a person to inherit it upon their death. While the owner retains control while alive, the property transfers to the named beneficiary upon the owner's death. In many states, naming a beneficiary is available for the following assets:

• Payable on death (POD) bank accounts
• Transfer-on-death (TOD) securities in a brokerage account
• Real estate subject to transfer-on-death deeds
• Vehicles subject to a transfer-on-death vehicle title
• Life insurance policies with a beneficiary designation
• Retirement accounts such as IRAs and 401(k)s

There are many benefits to taking the step to name beneficiaries before death. This step is quick and easy. For financial accounts, it's usually as simple as a form.

Get the Professional Help You Need to Avoid Probate

Probate is costly, time-consuming, and confusing. But, there are many methods of avoiding or simplifying the probate process. Contact a local estate planning or probate attorney. Depending on where you are in the process, an estate planning or probate attorney can tell you ways to streamline probate.