Probate is a multi-step legal process that can take several months to wrap up. Unsurprisingly, many people want to avoid probate whenever possible so that loved ones can receive their inheritance as quickly as possible.
That being said, probate is necessary in many situations to ensure that a decedent’s assets fall into the hands of their rightful beneficiaries. Here, we’ll review the scenarios in which probate is a necessary step in the legal distribution of a decedent’s estate.
Will or No Will, Probate May Be Required
Probate is typically associated with a decedent’s last will and testament, as the process needed to carry out the will arrangement. While it’s true that probate is often needed to authenticate a will and carry out its provisions, it may also be necessary if the decedent didn’t leave behind a will.
In the case that the decedent didn’t create a last will and testament, probate may be needed to distribute their estate according to the state’s law of inheritance. This means that, in this scenario, probate is used to transfer the estate from the decedent to the decedent’s heirs at law.
Scenarios That Require Probate:
The Decedent Had Sole Ownership of Property.
When the decedent was the sole owner of a piece of property, probate will be necessary. This means that there were no joint owners on the property and that a payable on death designation wasn’t made.
The Decedent Didn’t Name Beneficiaries.
If the decedent didn’t designate any beneficiaries in his or her will, probate is typically necessary. In this case, the probate process will likely be used to transfer the decedent’s estate into the names of his or her beneficiaries.
Named Beneficiaries Have Predeceased The Decedent.
If named beneficiaries in a will predeceased, (died before), the decedent, probate is needed to redistribute the assets left to those beneficiaries. In this case, the assets may be divided among living beneficiaries, be left to the decedent’s children, or be left to the decedent’s closest kin (according to state intestacy laws).
The Decedent Had A Tenancy in Common.
For decedents who own property in their name as a tenant in common with other people, probate is typically required. For this scenario, probate is usually used to transfer the assets from the decedent to the beneficiaries.
When Is Probate Not Necessary?
On the other hand, probate typically isn’t necessary in these scenarios:
- When the estate is deemed a “small estate” according to state laws
The majority of U.S. states allow qualifying “small estates” to omit the probate process. The definition of a small estate can vary greatly from state to state, generally based on total dollar value.
- When a designated beneficiary was named in the will
If the decedent specified a beneficiary or beneficiaries in his or her last will and testament, probate can typically be avoided. In this case, the decedent’s assets will be transferred to the named beneficiaries immediately. Bank accounts, retirement accounts, life insurance, automobiles or boats, and investments are assets that can have a designated beneficiary.
- When the decedent placed assets in a trust
Placing assets in a trust is one of the most common ways to avoid probate. This method can be used to ensure that loved ones receive their inheritance immediately, without the time or effort involved in the probate process. Several types of trusts exist to fulfill various needs. Irrevocable trusts, revocable trusts, asset protection trusts, and charitable trusts are a few common trust examples.
- When the decedent’s property was jointly owned
In the case that the decedent’s property was jointly owned, ownership will instantly transfer to the living owner or owners. This is called “rights of survivorship”.
To allow their beneficiaries to avoid the probate process, some individuals arrange their will to avoid probate in particular. This requires planning, organization, and close attention to the state probate laws. But, probate avoidance can also save beneficiaries money by omitting legal fees and, in some circumstances, estate tax.
In most cases, the family of the decedent will need to interact with the probate court to some degree for assets to be released. But, with careful estate planning, the probate process can often be simplified or even avoided altogether.