Learning what is probate and how to avoid it can help you make things easier for your loved ones after you're gone. Here's what you should know.
What is probate?
Probate is a common term associated with estate planning. Essentially, the probate process is a court-supervised verification of your will. The process begins when your executor submits your will to the courts.
Your assets go to probate, and after the court reviews your will, an administrator distributes your assets as you wish. If you don't have a will before you die, the court controls the distribution as per laws in your state.
What is the purpose of probate?
The purpose of the probate process is to legally transfer your assets after you pass. While it may sound relatively straightforward, it's often a complicated process that may involve gathering a lot of information and documentation, verifying it, paying off debts and taxes, and then passing the remaining assets to beneficiaries as stated in the will.
Having all that information set ahead of time can make the probate process far less costly and time-consuming.
What does probate mean?
Probate refers to the administrative process of determining the authenticity of a will and then distributing the assets to beneficiaries.
If there is no will, probate helps determine the legal owner of your assets. However, that process may take much longer, upwards of a year in court (and sometimes more), to go through everything as specified by the regulations laid out by your state.
What is the probate process?
Your executor will start the probate process if you die with a will. A surviving spouse or a child is often the will's executor.
The executor will file the will with the local probate court. A judge will review the documents and may hold a short hearing with the beneficiaries to object to or accept the will's contents. The judge will sign off if everyone agrees, and the executor now oversees the estate's finances.
They will need to gather all assets, pay any bills or debts, and distribute the property or assets as laid out in the will. Then, they'll file your final taxes and cover anything you may owe.
When does a will go to probate?
Most wills will go to probate, though it can be a relatively quick and painless process if you have your documents set. In those cases, the court reviews your assets and your will to verify and authenticate everything and then distribute your assets as you've laid out as part of your estate planning process.
How long do you have to file probate after death?
The answer depends on the laws in your state, and the rules vary. For some states, it's right away. For others, your executor may need to wait a specific period after death before filing. However, it's typically a good idea to file sooner rather than later to get the probate process started.
A benefit of working with an advisor and an estate planning attorney is they will know the specific rules for your state. So, they can help your loved ones after you pass to ensure they are following the proper regulations and meeting deadlines.
How to avoid probate
You can take a few steps to try and avoid probate and make the process run through the courts more quickly. These include:
- Learn the basics of estate planning. Your advisor may also help you set up a revocable living trust which may help avoid probate.
- Work with an estate planning attorney to get the proper guidance on handling more complex assets, such as naming a spouse as a joint tenant on real estate.
- Name beneficiaries on assets, including your retirement accounts, bank accounts and life insurance policy.
Knowing what probate is and what is required can speed up the process and distribute your assets more efficiently.
Also consider the following action items that may make the process easier for your loved ones and the executor of your estate:
- Save your documents in one place so your executor can access them. One way to do that is by creating an "in case of death" binder.
- Review your will and beneficiaries regularly and make necessary updates, especially after significant life changes.
Getting started with estate planning? You may want to review your life insurance coverage. Learn more about your life insurance options.