The probate process is something that you should gain an understanding of when you get serious about your estate planning efforts. This process takes place under the supervision of a court. It can be a factor when assets are changing hands after someone dies.
This process is necessary when a person passes away while he or she was in direct, sole personal possession of property. For example, if you did nothing to divest yourself of your property in any way, and you arrange for its distribution through the terms of a will, it would be admitted to probate. The property in question would become probate property.
During probate, the executor or personal representative that you nominate when you create the document would handle the business of the estate. The administration of the estate would be supervised by the probate court.
The process serves a purpose, but it is not always positive for the rightful heirs. Probate is time-consuming; it will typically take close to a year at minimum, and inheritances are not distributed to the heirs during the process.
There are also probate expenses to contend with, and interested parties can access probate records to find out how you decided to distribute your resources.
Transfers Not Subject to Probate
In some cases, asset transfers that would take place after your passing would not be subject to the probate process. Assets that remain in a payable on death account after you are gone would be transferred to the beneficiary outside of probate. These accounts can be opened at banks and brokerages.
If you have life insurance policies, the companies would pay the beneficiaries directly as long as all of the contractual obligations were met. The probate court would not be involved.
It is possible to add a co-owner to property that is in your possession. This is called joint tenancy with right of survivorship. If you add a joint tenant to your property, the surviving joint tenant would assume ownership of the entirety of the property after you pass away, and probate would not be a factor.
A revocable living trust can be a good estate planning tool for a wide range of people. If you convey property into a revocable living trust, the beneficiary would be able to distribute the property to the beneficiaries after you are gone free of the probate process.
Learn More About Probate
If you would like to obtain more information about the probate process and the various different ways that it can be avoided, download our in-depth special report on the subject. This report is being offered to our readers free of charge right now, and you can click the following link to access your copy: Free Probate Report.