The weeks and months after a death can be a whirlwind. This time can be not only emotionally draining but also full of financial and administrative challenges—and maybe even probate.
Probate guides the distribution of your assets. The best way to avoid a lengthy probate process is to have a clear and updated will in place before you pass away. If you don’t have a will or if your will is contested, probate comes with financial and logistical issues that can make it harder for your loved ones to not only grieve but also access your assets.
So, what is probate, how can you avoid it, and what should you do if you find yourself in it?
What is probate?
Probate is a legal process used to determine where a deceased person’s assets go, whether that’s cash, real estate, or possessions. If the person who died had a will, probate administers their assets according to the will. If they didn’t have a will, a judge decides during probate how to administer the estate.
Either an executor named in the will or a court-appointed administrator will execute the probate process according to the will’s and court’s instructions. The executor or administrator is the one who has legal permission to collect all assets; pay any taxes, fees, and liabilities; and assign remaining assets to the heirs.
Probate usually includes:
- Authenticating the will
- Creating an inventory and appraisal of the estate
- Paying the estate’s debts and taxes
- Distributing all assets according to the will or, if there’s no will, according to state laws
How does probate work with and without a will?
Probate works differently with and without a will. Since probate refers to the general administration of your assets, anything you leave behind will typically go through probate whether or not you have a will. But without a will, the process can get lengthy and complicated.
Probate with a will
If you die with a will in place, there’s already documentation to guide the division of assets. If you named an executor in your will, they will initiate the probate process by filing your will with the probate court.
During probate, the court supervises to authenticate the will and accept it as the deceased’s true wishes. The court then legally appoints the executor, which allows the executor to act on behalf of the estate. The executor will then distribute assets to the heirs as detailed in the will.
This fairly simple process can be wrapped up within a few months if there’s a clear will in place that all family members accept.
Probate without a will
If you or a loved one dies without a will, or if someone successfully challenges your will, the court considers the estate “intestate.” An intestate estate will enter the probate process, and the court will divide the assets according to state laws rather than a will. Note that to go through probate, your estate doesn’t have to be substantial; an estate is simply the assets you leave behind, from family heirlooms to your baseball card collection.
Without a will, you also won’t have appointed an executor. In this case, the court appoints an administrator. An administrator does all the same things as the executor: paying off debts and locating heirs. When it comes time to distribute assets, the administrator follows the court’s directions about how to divide the estate.
Probate without a will can take much longer than probate with a will. With large estates or combative family members, probate can last years.
How do you avoid probate?
Before you pass away, you can take steps to help your estate avoid probate. While writing a will and naming an executor are the starting points, there are some other important factors to address. Different states have different rules for how to avoid probate, and a lawyer or financial advisor can help you take the right steps for your situation. In general, any of the following can help keep your estate out of probate court:
- Establish joint ownership: Any property you own jointly with someone else, like your home, can typically pass directly to the surviving owner with no probate required.
- Create assets with a beneficiary: Assets like retirement accounts or life insurance that has a beneficiary will pass directly to that person without going through probate. On the other hand, find out what happens to life insurance without a beneficiary.
- Start a pay-on-death (POD) account: A POD account essentially designates a beneficiary for your bank account so the money in the account can get paid directly to that person. If you’d like to do this for your investment accounts, you’ll set up a transfer-on-death (TOD) account instead.
- Establish a living trust: This is a common way for people with high-value estates to avoid probate. With a living trust, the person writing the trust decides which assets to put into the trust and who will act as trustee. When the trust owner dies, the trustee will divide the assets outside of probate.
- Give away your assets: If you give things away while you’re alive, those items can’t be included in your will and therefore will pass outside of probate.
Does probate work differently by state?
Probate can work differently depending on your state. If you don’t have a will, the court will administer your assets based on state laws, so understanding how probate works in your state is important.
Most states clarified their probate process by adopting the Uniform Probate Code (UPC). The UPC makes probate simpler, less expensive, and standardized across states. Cornell Law School has more information about the UPC.
Small estates can avoid probate in many states, depending on state law. The cost of probate can also vary by state. Each state typically has a filing fee, but there may also be additional fees if the will is contested or if the estate requires supervised administration.
What are the cons of probate?
Probate can be helpful for some estates, especially if the will is contested or there’s no will in place. But there are some real cons of probate, which is why many try to avoid it.
- Probate is public record: Personal and financial matters become available to the public via probate. This can be especially compromising for well-known families or those with large estates.
- Probate can be expensive: As we mentioned earlier, probate costs can vary by state. But no matter where you are, probate can be costly. The estate must pay out all court, attorney, and executor fees, which can impact the estate’s value.
- Probate can be lengthy: With a will, probate might take as little as a few months. Without a will, probate can last for years, and it can take countless hours to build a case for the court.
- Probate can be stressful: The executor is often a family member, or the court often appoints a family member as the administrator. For someone who hasn’t filled this role before, it can be stressful and complex.
Provide for your family after you’re gone
Probate is designed to put the right assets in the right hands. But it can be complex, time-consuming, and costly. And it can delay your loved ones getting the financial support they need. Products like life insurance help ensure your family has much-needed resources no matter what’s happening with probate.
Since you’ll designate a life insurance beneficiary, your death benefit will pay out directly to them. Life insurance policies also typically pay out quickly, compared with the months or years that probate can last. Consider final expense , whole life, or universal life for coverage that lasts your entire life. Term life offers more affordable coverage that lasts only a set number of years.