Certain things will trigger an image or an opinion. Often, when you hear the word probate, you immediately think of avoidance. While probate does not have a positive reputation, it is a reality that many individuals and families will have to face. As such, it is important to understand what probate is because you might have to go through it one day.
What is probate?
In simple terms, the probate process is a court-supervised proceeding in which the assets of the decedent are retitled in the name of their heirs. This process also validates the will of the decedent, and distributes assets and property to heirs in accordance with the will, to ensure that the debts of the estate are paid off.
In other words, probate is the formal process to pass assets from an individual that passed to their heirs or beneficiaries. While this seems simple, it is not always simple, quick and efficient. In fact, it often carries the reputation of being long and complex.
When probate is necessary
If an individual passes without a will, this will require the probate process. Having a will does not mean that probate is not needed; however, having a will could ease the process. Probate is deemed necessary when assets or property cannot be transferred by contract law, state titling law or trust law.
This often include property awarded through a will. This includes property such as household goods, vehicles and property owned at the time of death that is not designated in the will. In contrast, probate is not needed for retirement funds with named beneficiaries, life insurance policies with named beneficiaries, annuities with named beneficiaries, pay-on-death accounts, transfer-on-death accounts, property held as joint tenancy with rights of survivorship, property held as tenancy by the entirety and all trust property.
Even with a better understanding of the probate process, your overarching goal might still be to avoid probate for your heirs. This is an understandable goal and one that could be addressed with a legal professional when drafting or updating your estate plan.