When an individual passes away, the distribution of their property is determined by a will, if one exists. The probate court is responsible for validating the will and ensuring its directives are followed. In the absence of a will, the court appoints a Personal Representative to allocate the property according to the state’s Descent and Distribution laws, which typically follow hereditary succession.
This process involves gathering the deceased’s assets, settling liabilities, paying any due taxes, and distributing the remaining property to the rightful heirs. State laws govern the probate procedures, and these laws have been the subject of significant debate and reform since the 1960s.
Which Assets Require Probate?
Probate is necessary for certain types of property, including:
- Assets solely owned by the deceased, such as real estate or vehicles.
- Jointly owned property, where the deceased’s name is on the title along with another person.
These assets are referred to as probate estates. If court proceedings are required, the executor must initiate and conclude the case. Executors often hire attorneys to assist with these proceedings, with legal fees typically paid from the estate’s funds.
It’s a common misconception that having a will eliminates the need for probate. However, some states mandate probate regardless of whether a will exists. It’s advisable to consult an attorney or local probate court to understand the specific legal requirements. Without a will, state laws will dictate how the property is distributed.
Assets Exempt from Probate
Many assets do not need to go through the probate process. For example, if the deceased had joint accounts with a spouse, probate is typically unnecessary. Other assets that bypass probate include:
- Retirement accounts
- Life insurance proceeds
- Properties held in a living trust
- U.S. savings bonds registered as payable-on-death
- Pension distributions
- Wages and salaries
Additionally, most states offer simplified probate procedures for small estates. A process known as “summary probate” can be used if the estate’s value is below a certain threshold, which varies by state. This allows even large estates to benefit from simplified procedures if only a small portion of the assets require probate.
Joint Ownership and Probate
When property is jointly owned with rights of survivorship, it automatically transfers to the surviving owner(s) without court intervention. This applies to both real estate and joint bank accounts, provided the title document specifies survivorship rights.
Three Types of Assets That Must Go Through Probate
- Individually Owned Assets
Assets solely owned by the deceased, such as vehicles, investment accounts, and bank accounts, must go through probate. This also includes items without a title document.
- Tenants-in-Common Assets
In a tenants-in-common arrangement, each owner has a specific share of the property. Unlike joint tenancy, these shares do not automatically transfer to the surviving owners and must go through probate.
- Assets Without a Named Beneficiary or With a Predeceased Beneficiary
Some assets, like life insurance policies, allow the owner to name a beneficiary. If no beneficiary is named or the beneficiary predeceases the owner, the asset must go through probate.
Conclusion
Proper estate planning ensures that an individual’s property is distributed according to their wishes after death. This not only benefits the owner but also provides clarity and security for their heirs.
