When a loved one passes away, there is the important matter of dealing with the deceased person’s estate and making sure their final wishes are honored. By default, this is usually done through the state’s legal probate process. However, there are some legal tools that can provide alternative pathways to probate in specific scenarios. For instance, in some states, you may be presented with the option between a spousal property petition vs. probate. This guide will explore what each option means, their advantages and disadvantages, and how to choose between the two.
What is a Spousal Property Petition?
A Spousal Property Petition is a state-specific legal tool that can be used to transfer or confirm property to a surviving spouse. The process involves one hearing in court and can help the surviving spouse avoid the full probate process. The probate process can be costly and lengthy, so using valid legal shortcuts when available is often favorable. Be sure to read our full guide, What is a Spousal Property Petition, to learn more.
Pros of a Spousal Property Petition
Filing a Spousal Property Petition can help you obtain a simplified probate procedure. The petition can be used to transfer property directly from a deceased individual to the surviving spouse or domestic partner. This means that the property in question does not have to go through the full probate process, which can save a lot of time and money. This is the key advantage associated with using a Spousal Property Petition.
The Spousal Property Petition can be especially effective to transfer community property to a surviving spouse, when the decedent’s estate only consists of community property. Probate is helpful when there may be debate over whether property is community or separate, and there are other beneficiaries in the mix. If the estate is simple and contains only community property, then the petition can be a shortcut that costs much less than a formal probate proceeding.
Cons of a Spousal Property Petition
However, there may be some reasons why a surviving spouse might not want to file a Spousal Property Petition. For starters, there could be potential creditor claims or a Will contest that could lead to litigation. In such cases, the petition would be null and the formal probate process would be required.
If the decedent decided to transfer all of their property to a Trust, then there’s also no reason to sue a Spousal Property Petition at all. In this case, the administration of the Trust would not require probate.
What is Probate?
Probate is a legal process that allows estate property and assets to transfer between a deceased individual and their beneficiaries. If the decedent had a Will in place, then the probate court will authorize these assets to be distributed per their wishes. In the absence of a Will, the assets are distributed using next-of-kin rules laid out in state intestate succession laws.
There are several other important functions of probate as well. For starters, the Will is validated through probate, after which an Executor who will oversee the administration of the estate is appointed. Further, other important roles are appointed through probate, such as Guardians for minor children or pets, as well as Conservators.
Probate court is also the judicial modality that addresses any litigation that may occur as a result of a decedent’s estate. To learn more about Probate in full, be sure to read our dedicated guide introducing Probate - What Is Probate & How To Avoid It.
Pros of Going Through Probate
You’ll quickly observe that probate is typically associated in a negative context, reasons for which we’ll touch on in the next section. However, it’s important to note that probate is an important judicial process that can be beneficial.
For starters, not all Americans pass away with an Estate Plan in place. When someone passes away intestate (without a Will), probate serves as a step-by-step procedure that ensures that beneficiaries inherit property. It may take some time, but state laws are in place to help determine how the estate should be distributed as fairly as possible. This protects estates, especially small ones.
Second, a Will becomes a public record when it passes through probate. If for some reason an individual wanted their estate distribution to be public knowledge, probate could be desirable.
Last but not least, not all individuals feel that they have the financial resources to put together an Estate Plan. If your estate goes through probate, the estate will bear the costs after your death. However, Trust & Will has two counter-arguments to this reasoning. Allowing the estate to bear the brunt of estate planning costs eats into the value of what can be passed down to your children. Also, contrary to popular belief, estate planning is not as expensive as it used to be. We’ve made it our mission to provide affordable estate planning tools accessible to the majority of Americans. By investing in an Estate Plan now, you can better preserve the value of your estate to pass down to your future generations.
Cons of Going Through Probate
It’s no big secret: probate is infamous for how it can eat up time and resources. In some states, probate can take several months. However, it’s safer to estimate that it will take a year or more. Further, legal fees can reduce the value of an estate by up to 10 percent.
Probate can be a tough process that causes wear and tear on beneficiaries who are also grieving the loss of a loved one. Not only are they forced to wait to receive their inheritances for an uncertain amount of time, the inheritances could be worth significantly less by the time probate concludes. Last but not least, attending court proceedings and attorney meetings is likely the last thing anyone would want to do during difficult times.
Spousal Property Petition vs Probate - When to Use Each
In most cases, the Spousal Property Petition is the preferable alternative to probate when it is available. First, you must be the surviving spouse of the decedent to qualify. It also must be a legal proceeding that is available in your state.
However, there are some instances in which the probate process may be required, or even preferable. First, there may be property that must be split between the surviving spouse and other beneficiaries, such as children and other close relatives. Probate is also needed when there is a likelihood of litigation that can result from problems with creditors or inheritance disputes.
Last but not least, there are some legal tools that can make it such that neither Spousal Property Petitions nor probate are required. For instance, the decedent may have set up a Trust such that all their property and assets will pass to Trust beneficiaries outside of probate, and such that a Spousal Property Petition isn’t necessary. There are also certain types of property deeds that allow property interest to transfer automatically between a deceased spouse and their surviving spouse, such as an interspousal property deed or a transfer-on-death deed.
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Spousal Property Petition vs. probate — is one better than the other?
In general, probate is known as a cumbersome procedure that can eat up time, your estate value, and cause undue stress for beneficiaries who are grieving. When possible, it is best to explore what alternative options are available to you, and if you should use them.
As the surviving spouse of a decedent, you may be able to use the Spousal Property Petition. This is a tool that allows property to transfer directly from your deceased spouse to you outside of probate. However, this guide discussed a few specific scenarios when probate may be required or preferential.
It’s also critical to point out that the use of a Spousal Property Petition is an example of reactionary estate planning. The onus is put on the beneficiary, in this case the surviving spouse, to figure out which legal avenues to pursue to lessen the impacts of probate.
Instead, an individual can opt for proactive estate planning to lessen the burden on their beneficiaries. The use of a Trust is a great example. By transferring all of your assets and property to a Trust, you can be sure that your estate will not have to go through probate. You can’t necessarily guarantee that your surviving spouse can successfully use the Spousal Property Petition (although it can be perfectly effective), and you won’t be around to provide any oversight. With this in mind, why not go for the proactive option?
At Trust & Will, we’ve provided an online estate planning solution that makes proactive estate planning as affordable as possible. Our Trust-based Estate Plan is affordable and easy to execute, no estate planning attorney required.
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