You may have the very best of intentions with making sure your loved ones are cared for after you pass. But sometimes, intentions just aren’t enough to make their burden of losing you any easier. Nearly every estate left behind after a person dies must go through something called a probate process, or the process by which their estate is legally distributed to beneficiaries. But if you don’t have a will or any other documented specifications for how your assets should be divided, the probate process can be troublesome, lengthy, and expensive for those it befalls.
Losing you is hard enough on the family you leave behind—it’s up to you to make sure they don’t feel any increased or unnecessary burdens during that difficult time. Part of that comes from understanding what the probate process is, and how you can properly prepare your estate for it.
What is Probate?
When someone passes away and has left behind a will, it should spell out how their assets will be passed on to their beneficiaries. Probate is the legal proceeding that oversees that process. It is a court-supervised proceeding that authenticates your will if you have one, and approves the executor you’ve named in your will to begin distributing your property and belongings according to your wishes.
During this process, all your assets must be located and assessed for their total value. After that, all taxes and debts on your property are paid. Only then can the remaining value of your estate be distributed to your beneficiaries.
If you have a will that has been created thoroughly and clearly, the probate process can be made much easier for all those who are involved. But if you pass away without a will in place, the probate process becomes much more complicated, timely, and costly to navigate. If you do not have a will upon your death, everything you own that does not have some sort of legally designated beneficiary goes through probate court to determine what to do with it. And if you have a will, much of what you own still goes through the same process, but it is made much simpler.
The property that must go through the probate process includes:
- Any inheritance assigned to a beneficiary who predeceases you.
- Any non-titled property: This is anything you own that doesn’t have paperwork associated with it, including household items and other belongings.
- Partner-owned investment properties: The court will step in to help determine how your share of the property should be passed down.
- Sole ownership property: Anything titled solely in your name must go through probate to determine ownership after your death.
How to Avoid Probate
There are certain assets that do not legally have to go through the probate process. But this can only be achieved through proper planning on your part. If you plan your estate correctly, you can avoid probate on:
- Items that have a beneficiary named: For example, your life insurance policy will have a named beneficiary, so the proceeds will go directly to them without going through probate.
- Items placed inside a living trust: A trust owns the items listed inside it, so when you pass away, those items go to your designated beneficiaries exactly as spelled out in the trust, negating the need for the probate process.
- Payable-on-death (POD) or transfer-on-death (TOD) items: If you specifically title property like bank accounts, real estate, retirement accounts, and stocks as POD or TOD, they can often bypass probate and transfer directly to your noted beneficiary.
- Jointly titled property with Survivor’s Rights: If you have designated some jointly-owned property with a title of Survivor’s Rights, then it will automatically go to the Survivor after you pass, without the need for probate.
One of the most reliable ways to avoid probate on this list is to establish a living trust. When you create such a fund inside a trust, you make the trust itself the owner of your assets. That means when you die, there is no question about who distributes the assets to the beneficiaries named inside it. Thus, there is no need for anything the trust covers to go through the long and tiresome probate process. This is one of the essential differences between wills and trusts, and you should consider which one makes the most sense for your situation.
The other options for avoiding putting your loved ones through the process of probate are to give your assets to them while you’re still alive, or keep your estate small. Reducing your estate’s value can drastically simplify the probate process and can even have certain federal and estate tax advantages. And in cases where a small estate meets a certain minimum threshold, they may be exempt from probate, or at the very least, qualify for an expedited probate process.
What to Expect During Probate
When creating your will or trust, it’s important to consider what your executor and beneficiaries will need to go through during probate, and plan for it accordingly.
Probate can take varying amounts of time depending on how large the estate is, and how clear the instructions left behind were. But for smaller estates, the average time to complete probate is usually within one year. For larger and more complicated estates, probate can take several years. It all depends how many assets there are to divide, who those assets are going to, and how thorough the estate planning was.
There are also several costs involved with the probate process. They, too, are affected by whether the deceased has a will, how big their estate was, and where they and their beneficiaries reside. But in general, you can expect the following costs to befall the executor or the estate:
- Attorney fees: Should they choose to utilize one, they are usually paid out of the estate.
- Compensation for the executor: There are often minimum values the executor of the estate can expect to receive from the estate to compensate them for their time and effort.
- Probate bond: Also called a Fiduciary or Executive Bond, these are bonds that protect the beneficiaries, and often charge a percentage of the amount needed for the bond.
- Court fees: Different counties have different filing fees for all documents and work associated with the probate process.
- Creditor notice fees: Notices of death must be filed to people like creditors and beneficiaries of the death, for which there are additional costs associated, often paid out of the estate.
To make things as easy as possible for your loved ones to acquire the assets you’ve left to them after you pass, it’s all about doing the proper planning while you still can. The Whisler Law Firm has an incredible team of estate planning lawyers ready to help you discuss your needs, your family’s needs, and how to preserve them after you’re gone. Call our office at 833-529-5677 or request a free consultation using our online form. We’ll guide you through the process of making sure your estate plan not only serves its purpose, but makes probate easier on those you love.