Probate

Probate is the legal process of wrapping up one's legal affairs by paying outstanding obligations and transferring assets to beneficiaries or heirs of the estate. This process only applies to assets that end up titled in someone's name alone (we call this a "probate asset") and does not apply to assets that have beneficiary designations (we call these "non-probate assets").

The difference between the two types is slight, but significant. The best example of a probate asset is a car title in the decedent's name. The decedent's dead and can't sign the title and no one will notarize the signature to sell the car. The only way to transfer the title is to apply to the probate court where the probate judge will appoint someone with legal authority to sign and transfer the title. On the other hand, a non-probate asset has a beneficiary designation. If you've ever seen a bank account that was "POD" (Payable On Death) to someone, that's a non-probate asset. At death, the beneficiary can claim the account from the bank with a death certificate—no one has to go to the court to get any authority to manage the account.

If a person has a will, the will is the set of instructions to the probate court of who should be in charge of handling your affairs and who gets your "probate assets" after your obligations are taken care of. If a person dies without a will, there's a statutory estate plan under that law that says who gets the probate property.

We help counsel people through this process so they don't have to stumble their way through the probate court and all it's requirements. We also help counsel people with strategies on when and how to probate assets so as to minimize exposure to creditors and to minimize costs.

If a loved one passes away with a beneficiary who's on public benefits like Medicaid, we may be able to help minimize the detrimental effect of the inheritance on those benefits. We have special know-how when it comes to keeping that person on benefits without necessarily losing all the inheritance.

I have a beneficiary designation on my bank account, does it go to probate?

Not necessarily. If the person you've designated as a beneficiary outlives you, then that beneficiary will be entitled to the account. But if you survive that person, then the account would go under the probate process.

Does my will control my retirement account when I die?

Not usually. If you have made a beneficiary designation, that designation is followed. It would only go under your will if the beneficiaries named were no longer living—or, perhaps you never made a designation at all.

Is probate bad?

No. The probate court and the probate laws have been provided for fairness and transparency. The process can slow down the transition of wealth to the beneficiaries and it can be expensive because of court costs and legal fees. But the process itself is not bad. It requires the person who's responsible to wrap up the affairs of the deceased to inform everyone what property exists to be administered. The beneficiaries then have the ability to address whether everything's there. Once the assets are inventoried, that person then has to account for every penny that's been run through the estate. This gives everyone, including the court, a chance to review what's happened to make sure no one acts inappropriately. So while it's not a bad thing, it can be unnecessary in small estates and where everyone gets along with a high level of trust.

Should we avoid probate?

It depends. Sometimes it's a needless expense. Sometimes it's the best forum to divide up someone's estate because of the transparency and oversight. And sometimes it's good because it gives someone clear authority to make a decision. For example, you can leave your home through a transfer on death affidavit to your four children. At your death they all have to work together to sell your home. But what if one doesn't want to share in the utilities while it's listed for sale and also disagrees on the sale price—then that person can stop the whole process. But if the house had instead gone through probate, the executor would have had clear authority to sell the house and carry the expenses and then all the proceeds would be divided up according to the estate plan without any issues of dealing with the difficult child. It always depends on the family relationships.