During our initial meetings with clients, they often tell us that one of their goals in preparing an estate plan is to avoid probate. However, they don’t always have a good understanding of what probate is or what avoiding probate might entail.
“Probate” is, essentially, the court-supervised process of winding up a decedent’s affairs by preparing an inventory of the decedent’s assets, paying any outstanding bills, claims, or expenses, and distributing the decedent’s remaining assets to his or her designated beneficiaries or heirs. The important phrase in that description is “court supervised,” as most, if not all, of the same work is required even if probate is unnecessary, either during the decedent’s lifetime or upon his or her death. All documents filed in connection with the probate administration, including a list of the beneficiaries, an inventory of the assets, and a final accounting of the probate administration, are public record. And, even with the advent of electronic filing, probate is a lengthy process that occasionally requires court appearances by the involved parties or their attorneys.
So, probate is often vilified in light of its public and sometimes tedious nature, and people seek to avoid it. Some methods of bypassing probate include joint ownership with rights of survivorship (most frequently used in the case of married couples), re-titling assets to a revocable trust, or making assets payable on death to one or more designated beneficiaries. However, whether or not “probate avoidance” is desired or necessary in a given situation will depend, in large part, upon the nature of the assets that would otherwise be subject to probate.
If you have any questions on this topic, please contact Lin Law LLC at (920) 393-1190.