Is Probate Necessary?
Probate is the court-supervised process by which a decedent’s estate is administered (assets are collected, valued, and distributed to their heirs/beneficiaries after debts and expenses are paid). But not all property is subject to the full probate process.
To determine whether probate is needed, the first thing you need to do is locate all assets of the decedent and draft an inventory and appraisal of the property. This is a list of all property of the decedent with a value as of the date of death. The need for probate will be determined by the types of assets and how much each asset is worth.
Certain types of bank accounts are not subject to probate. This is because the assets in these accounts pass automatically to someone else upon death. One example is a jointly held account with the right of survivorship (ownership pass to the survivor upon the death of the decedent). Another example is “pay on death (P.O.D.)” accounts. With this type of account, you can name a beneficiary who will receive the assets on death, avoiding the need for probate.
Life Insurance Proceeds
If the decedent owned a life insurance policy, the proceeds of this policy are distributed directly to the named beneficiary.
Retirement accounts and other death benefits pass to the surviving spouse or named beneficiary, depending on the circumstances, outside of probate.
Transfer on Death Deed
A transfer on death (TOD) deed names a beneficiary of real estate. If the decedent executes a valid TOD deed, this property should pass directly to the beneficiary outside of probate.
Assets Held in a Living Trust
Drafting a living trust is a popular way to avoid probate. Whatever assets are subject to the trust pass automatically to the successor trustee upon the death of the trustor. The successor trustee then distributes them according to your wishes as laid out in the trust document. If you are the successor trustee, these assets will not need to be probated.
Keep in mind that even if assets are not properly titled in the name of the trust, there may be another way to avoid probate via a Heggstad Petition.
The Estate is Worth $150,000 or Less
If the property left in the estate is valued at $150,000 or less, there are simplified procedures available to administer such an estate.
So to determine whether the estate is subject to probate, you need to first determine what assets are in the estate. For the assets that do not pass outside of probate, you need to figure out if the total value is over $150,000. If it is, then you probably need to probate the estate.
Helix Law Firm can help with probate and trust administration
If someone has passed away, we can help you determine the best way to administer the estate. If a full probate is necessary, we can file the petition and guide you through the process. If there is simpler way to accomplish this, we will advise you on the best method.
If you’re interested in learning more, please call us at (619) 567-4447 to schedule a free consultation.