Those who have heard the term probate in estate planning know that it is advisable to avoid it. But why should you avoid probate? Is there a minimum amount of assets that trigger probate? With a will, is probate necessary? Below are answers to some of these common estate planning questions many have.
What is probate?
Simply put, probate is a court-supervised process your estate goes through after you are gone regarding the distribution of your estate to the beneficiaries. The steps involved include validating your will and approving the executor to carry out your wishes. In the absence of a will, the intestacy laws in your residence state will come into play.
The whole process costs money, such as attorney fees. In addition, depending on the circumstances, it could stretch for months, putting your beneficiaries at a disadvantage. These are just some of the reasons to avoid probate.
Do all estates go through probate?
Not all estates go through probate, but the majority do. For instance, if you did not leave a will, everything you own will go through a probate court. Other scenarios include:
- Inheritance where the beneficiary passes away before the giver and no changes are made to the will
- Non-titled property
- Partner-owned investment property whose succession plans are not defined
- Sole ownership property with no instructions upon the death of the owner
Through proper succession planning, you do not have to go through probate. Items that have a named beneficiary, such as life insurance policies, the proceeds go directly to the designated beneficiaries without having to pass through probate. Items placed in a living trust and those payable or transferable on death do not necessarily need to go through probate. Also, jointly titled property with the right of survivorship does not need to go through probate if one party passes on.
Learning more about succession laws and the best estate plans for you will protect your interests and your beneficiaries too. Besides, you will have peace of mind knowing that your family’s future is safe when you are long gone.