The aftermath of a death is one of the most stressful events in life — and if you are the executor or administrator of an estate, you may be facing a lot of confusion on top of your existing grief and stress.
When dealing with estate matters, it’s important to have a clear understanding of whether or not your loved one’s assets need to pass through probate.
If you’re not sure whether or not you need probate, we’re here to help you figure that out.
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When is probate required?
In certain circumstances, probate is required in order to ensure the legal transfer of assets from a decedent to the rightful heirs.
During this process, the court decides who is legally entitled to the assets, if these details are not already formalized. The court’s job is also to confirm that the will and its directives are, in fact, legal, and that assets are distributed to the rightful heirs or devisees.
Generally, there can be several factors which may determine whether or not you need probate — for instance:
Type of property
Who owns the property
The state you are in
Value of property
Whether there is a named beneficiary
It’s up to the executor to go to a probate court, and, if there is no will or no executor, the probate court will appoint someone as the administrator.
Whether or not you need to go through probate is not dependent on whether there is a will. In fact, if there is a will, probate helps to ensure that it is followed properly. But, if there isn’t a will, sometimes probate is required in order to ensure that assets pass according to state laws of inheritance.
When is probate not required?
Estate assets which are under a certain state-based value also may not need to go through formal probate. There are simplified procedures in most states that only require an affidavit (sworn statement) to allow transfer of assets from small estates.
Here are a few types of assets which are typically automatically transferred and therefore don’t need probate:
Jointly held or co-owned assets (Joint Ownership With Rights Of Survivorship)
Assets that already have a designated valid beneficiary (eg: retirement accounts)
Assets which include a payable-on-death (POD) or transfer-on-death (TOD) provision
Assets in a living trust
Life insurance with valid beneficiaries
Pensions with valid beneficiaries
Some other types of property ownership (like community property)
Some other assets such as household goods and vehicles are subject to certain state inheritance laws (like vehicles) and may pass through affidavit of survivorship
Any contractual agreement (eg: Business Buy-Sell Agreements)
Since estate asset threshold amounts vary from state to state, and there are various other factors which may determine whether or not you need probate, we strongly recommend that you review our resources page for more information, and speak to a trusted professional if you still have questions.
Estate Assets & Probate
Since each state has a different minimum estate value threshold for probate as well as other different probate and inheritance laws, the dollar value itself may not be enough to tell you whether or not an estate requires probate.
You may also have a situation where the estate includes several assets which don’t require probate, but the total value of the estate is high. In this case, you would usually only need to consider the value of the probate assets.
With smaller estates, often you can either sign an affidavit to transfer assets to the appropriate heirs or use another means to simplify the probate process.
But bear in mind that there are some instances where probate is required even though the estate is below the threshold value — for instance, should an insurance or title company demand legal proof of property ownership, they may push for the probate process to obtain this legal proof. State laws vary regarding probate requirements for property, and in certain regions they are more complex than others.
Do you need help with Probate or your Estate Plan? At Trust & Will, we’re here to help you keep things simple. You can create a fully customizable, state-specific Estate Plan from the comfort of your own home in just 20 minutes. Take our free quiz to see where you should get started, or compare our different estate planning options today!
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