Does a Will Always Have to Be Probated?
Not All Wills Have to Be Probated
Does a will always have to be probated? Not necessarily. A number of circumstances might make probate unnecessary.
Probate and Property Held in Joint Names
Many people own certain assets in joint names with their spouses, children, siblings or others. If an asset is owned jointly with "rights of survivorship," it will pass automatically by operation of law to the surviving owner or owners. Probate isn't required and, in fact, the decedent does not have a legal right to leave his ownership interest in the property to anyone else in his will.
If he did include such a provision in his last will and testament, the court would not uphold it.
Probate and Property With Designated Beneficiaries
Many people own assets that are "payable on death" to one or more designated beneficiaries. These assets pass automatically by operation of law to the designated beneficiaries, outside of probate.
The same applies to retirement accounts and insurance policies with named beneficiaries. The accounts or proceeds go directly to these individuals. Many people buy life insurance to provide income replacement and a money source for paying off their debts when they die. Because these death benefits pass automatically and directly to designated beneficiaries under the terms of the policy contract, they don't become part of the deceased's probate estate.
Many people invest in retirement accounts, such as 401(k)s, IRAs, and annuities, to plan for their retirement.
If the account owner dies before using up the entire account for his retirement needs, the account will pass automatically by operation of law to its designated beneficiaries. Again, probate is not required.
Probate and Revocable Living Trusts
If the decedent formed a revocable living trust and funded his assets into the trust, they would not require probate.
Living trusts avoid probate, allowing assets to pass to beneficiaries under the terms of the trust agreement.
Probate is generally required to transfer property out of the name of a deceased individual and into the name of a living beneficiary when the asset is not set up to transfer directly by operation of law. This is the case with or without a will. But an exception exists to even this rule, and some estates may not have to be probated.
Virtually every state offers abbreviated probate proceedings for small estates with values under a certain dollar amount. The deceased's property may be claimed by an affidavit approved by the court. A surviving spouse or child may simply take the affidavit to a bank or other institution and take ownership of the property under its terms.
Even if your state doesn't offer this option, most provide for summary or simplified probates with less court supervision and fewer legal requirements. Consult with a local estate planning attorney to find out where your state stands.
NOTE: State laws change frequently and this information may not reflect recent changes. Please consult with an attorney for current legal advice. The information contained in this article is not legal advice and is not a substitute for legal advice.
- When is Probate Necessary?
- Understanding Individual Ownership of Property
- Understanding Joint Ownership of Property
- Understanding Title by Contract
- Using Joint and POD Accounts to Avoid Probate
- Using a Revocable Living Trust to Avoid Probate