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Don't Be Afraid of Probate

You have probably heard this advice many times: Try to keep family assets out of probate. Nevertheless, in many states throughout the country, probate is a relatively painless procedure to endure, especially if the decedent has created a legally valid will. In addition, steps can be taken beforehand to minimize the red tape for heirs.

What exactly is probate? It is the legal procedure for winding up the decedent's affairs, paying debts including medical or nursing home bills and distributing the assets of the estate. Where there is a will, the heirs typically hire an attorney to have the will validated. Since probate is a court-supervised process, there are legal fees and other administrative fees to be paid out of the estate. There is also the hassle and delay of a judicial process.

For this reason, people often try to pass much of their estate to their heirs outside of probate. This is perfectly legal.

Case in point: Any property owned jointly with another person under a designation of "joint tenancy with a right of survivorship" will pass to the survivor automatically upon the death of the decedent without the probate process. Similarly, any assets such as life insurance, retirement funds and bank accounts naming a beneficiary will also pass automatically without probate. In fact, if the decedent sets up a trust naming himself or herself as trustee and the heirs as beneficiaries, all the assets transferred to the trust would pass outside of probate. Since the assets pass to the beneficiary immediately upon the decedent's death, they are not part of the decedent's estate and, thus, avoid probate.

State law governs probate, so the actual process will differ somewhat from state to state. Some states have simplified probate for estates with assets under $100,000. Others have provisions for simplified probate requiring the consent of all the beneficiaries. In most states, probate is relatively painless, unless there is a dispute over the will or over the executor's actions.

Probate is not to be avoided at all costs, but it can be time consuming for certain estates. If your family owns sizeable assets, you might investigate the benefits of a trust arrangement that can bypass probate. Be sure to obtain expert professional assistance in this area.

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