Source: Krause Estate Planning & Elder Law Center, Madison WI
Probate is the legal process through which a deceased person’s will is validated by a court, and their estate is administered and distributed according to that will, or, if there is no will, according to state law. This process ensures that the deceased’s debts and taxes are paid, and that the remaining assets are transferred to the rightful heirs or beneficiaries. Probate is sometimes necessary to:
Authenticate the Will: The court confirms that the will is valid and was created by the deceased without undue influence.
Appoint an Executor or Administrator: The court officially recognizes the person responsible for managing the estate.
Settle Debts and Taxes: Creditors are notified, and outstanding debts or taxes are paid from the estate.
Distribute Assets: The remaining assets are distributed to heirs or beneficiaries according to the will or state law if there is no will.
How Can Probate be Avoided?
Avoiding probate can save time, reduce costs, and maintain privacy for your estate and heirs. Here are some common strategies people use to bypass the probate process:
Create a Living Trust
A living trust is a legal document that holds your assets during your lifetime and specifies how they should be managed and distributed after your death. Because the trust owns the assets, they don’t go through probate. Instead, the successor trustee you name can transfer assets directly to beneficiaries.
Use Joint Ownership with Right of Survivorship
Property owned jointly with rights of survivorship automatically passes to the surviving owner(s) when one owner dies, avoiding probate. This is common with real estate, bank accounts, and other assets.
Name Beneficiaries on Accounts and Policies
Designate beneficiaries on retirement accounts, life insurance policies, and payable-on-death (POD) or transfer-on-death (TOD) accounts. These assets transfer directly to the named beneficiaries without going through probate.
Give Gifts During Your Lifetime
Transferring assets as gifts while you are alive reduces the size of your estate and, therefore, the assets that might be subject to probate.
Hold Property in a Revocable Living Trust
Similar to a living trust, this allows you to retain control over your assets during your lifetime while avoiding probate after death.
Use Small Estate Procedures
Some states have simplified probate or small estate procedures for estates under a certain value, which can avoid the formal probate process.
By using these methods, you can help ensure a smoother, faster transfer of your assets to your loved ones without the delays and expenses often associated with probate.
Why Do Many People Prefer to Avoid Probate?
While probate is designed to ensure a proper transfer of assets, many people actively seek to avoid it due to several drawbacks.
Time-Consuming Process: Probate can take several months to over a year to complete, delaying the distribution of assets to heirs. This can be a source of stress for grieving families who may need immediate access to funds.
Costly Fees and Expenses: Probate involves various fees — including court costs, executor fees, attorney fees, and administrative expenses — that can significantly reduce the value of the estate passed on to beneficiaries.
Public Record and Privacy Concerns: Probate proceedings are part of the public record, meaning anyone can access details about the estate, including assets and debts. Many people prefer to keep their financial affairs private.
Potential for Family Disputes: The probate process can sometimes lead to conflicts among heirs, especially if the will is contested or if there is ambiguity about the deceased’s intentions.
Lack of Control Over Asset Distribution Timing: During probate, the court oversees the distribution of assets, which can limit the flexibility of the executor and delay beneficiaries from receiving their inheritance.
Complexity and Administrative Burden: Probate requires navigating legal paperwork, court appearances, and deadlines. For families without legal expertise, this can be overwhelming and stressful during an already difficult time.
Because of these reasons, many individuals plan their estates to minimize or avoid probate, aiming for a smoother, quicker, and more private transfer of their assets to loved ones.
How an Attorney Can Help
When it comes to estate planning and the transfer of assets after death, working with an experienced probate attorney can make a significant difference, whether your goal is to avoid probate altogether or to ensure the probate process goes smoothly if it becomes necessary.
Helping You Avoid Probate
One of the primary roles of an estate planning attorney is to help you design a strategy that minimizes or eliminates the need for probate. Probate can be time-consuming, costly, and public, so many people want to avoid it if possible. An attorney can guide you through various legal tools and techniques to achieve this, including:
Creating Living Trusts: An attorney can draft a revocable living trust tailored to your specific needs. Unlike a will, assets placed in a living trust bypass probate because the trust owns the assets. Your attorney ensures the trust is properly funded and legally sound, so your beneficiaries receive their inheritance efficiently.
Establishing Beneficiary Designations: Many assets — such as retirement accounts, life insurance policies, and payable-on-death bank accounts — allow you to name beneficiaries directly. An attorney can help you complete these designations correctly, ensuring that these assets pass outside of probate.
Setting Up Joint Ownership: An attorney can advise on the best way to hold property jointly with rights of survivorship, which automatically transfers ownership upon death without court involvement.
Gifting Strategies: If you want to reduce the size of your estate and avoid probate on certain assets, an attorney can help you plan lifetime gifts in compliance with tax laws and legal requirements.
By working with an attorney to implement these strategies, you can protect your privacy, reduce costs, and speed up the transfer of your assets to your loved ones.
Assisting When Probate Is Necessary
Despite careful planning, probate may still be required in some cases, such as when there are assets solely in your name without beneficiary designations or when disputes arise among heirs. In these situations, an attorney’s expertise is invaluable to ensure the probate process is handled efficiently and correctly.
Filing and Managing Probate: Probate involves submitting the will to the court, inventorying assets, notifying creditors, paying debts and taxes, and distributing the remaining estate. An attorney guides executors or administrators through each step, ensuring compliance with state laws and court procedures.
Resolving Disputes: If family members contest the will or if there are disagreements about asset distribution, an attorney can mediate or represent parties in court to resolve conflicts and protect your interests.
Minimizing Delays and Costs: Probate can be complex, but an attorney’s knowledge can help avoid common pitfalls that cause delays or unnecessary expenses, making the process smoother for all involved.
Providing Peace of Mind: Navigating probate during a time of loss can be overwhelming. An attorney offers reassurance and professional support, allowing families to focus on healing while the legal matters are handled competently.
Whether your goal is to avoid probate or to manage it effectively when necessary, an experienced attorney plays a crucial role. They provide tailored advice, prepare the right legal documents, and guide you or your loved ones through the complexities of estate administration.
