Estate Planning/Probate

How can I avoid Probate, and do I really need to?

Nov 6, 2020

People often think of Probate as a horrible process that needs to be avoided at all costs.  That’s not always the case.  Sometimes people may want the protection of the Probate Court to ensure their estate is handled properly.  We know who is going to cause problems after we die.  Sometimes the Probate Court can protect your other heirs from those issues.

For many people, a standard Will takes care of passing our assets to the people that we want them to go to.  Other people may need a Trust.  Other people rely upon naming beneficiaries and jointly titling assets in the name of the person to who they want to receive the asset upon their death.  Each process works differently, and it’s important to choose the right process for your needs.

Think of your estate in terms of three buckets.  The first is the bucket where all assets that have named beneficiaries or joint owners.  We’ll call this the Heirs’ bucket.   The second is the bucket where all assets that are named in a Trust will go.  The last bucket is where all other assets go, which we’ll call the Probate Bucket.

When you name a beneficiary on your life insurance policies or retirement accounts, those items will pass directly to the Heirs upon your death and do not need to be probated.  Likewise, if your assets are jointly titled in survivorship, or if they are set up as “Transfer Upon Death” accounts, they will pass directly to the joint owner or transferee upon your death without probate.   Beware because if the heir or joint owner dies before you, the transfer will fail and the asset will need to be probated.  Additionally, beware that not all jointly owned property is held in survivorship.

When a Trust is created, it is possible to name assets in the name of the Trust while you are alive.  You can title real estate, cars, bank accounts, and other such assets in the name of the Trust and still use them as your own during your lifetime (so long as the Trust allows).  When you pass, the Trust document will direct who should receive any remaining assets upon your death.  Trusts are commonly used when there are minor children or disabled family members that need to be provided for.  They are also sometimes used to ensure that agreements between spouses are honored after death.  Sometimes they are used to protect the estate from creditors or to simply get assets to the heirs more quickly and save on attorney’s fees.

When assets are titled in your name only with no named beneficiary, they must be probated.  Probate is not a four-letter word, but it does require additional effort and cost.  A proper estate plan will consider all assets and minimize the need for probate while also protecting the interests that are most important to the client.  It’s important to discuss your concerns with your attorney so that the attorney can help you best choose the process that will be right for you.