Probate is the court that handles the administration of your estate when you die. Many people believe that probate is mandatory in every situation. However, it may not always be necessary to go through the expensive and time-consuming probate process. Probate is compulsory only if there is no other way to determine who receives what from the estate. Here are a few situations that may mean probate is not required.
Some accounts, such as life insurance policies and retirement funds, give you the option to designate someone to inherit those dollars when you die. The person you name is the beneficiary. Naming a beneficiary usually just requires completing a form and submitting it to the proper office. When you die, your beneficiaries receive the proceeds; the only requirement is a certified death certificate and the appropriate forms. You can also designate a beneficiary for bank accounts by using a payable on death or transfer on death account.
Rights of Survivorship
Some assets belong to more than one person through joint ownership, which often carries with it rights of survivorship. When one person dies, the surviving owner(s) inherit the property automatically. Probate is not necessary. No legal process has to take place at all other than removing the name of the deceased person from the ownership records, usually the deed or title.
Married people have presumed rights of survivorship as well. However, if the couple doesn’t want those rights in place, they can specify that. Unmarried parties who own property together do not have assumed rights of survivorship. They can create those rights by adding the right language to the ownership documents.
If no other mechanism exists to establish a path for an inheritance, the probate court may be required. If the only owner of the property is the person who died, then probate is usually necessary. A power of attorney is not valid once the person who signed it dies, so the probate court must issue an order to grant someone ownership. The court appoints an executor who handles the administration of the estate and passes them to the heirs once all of the estate’s business is complete.
When a loved one dies, the emotions and questions left behind are hard for the friends and family — trying to sort through who owns what adds even more pressure.