When an asset has singular possession or only one name on the title, then only a probate court has the power to transfer ownership. However, there are a few situations where the probate process can be avoided, each requiring the consent of the decedent before their passing. Therefore, if you have a jointly owned property, are designated as a beneficiary, or belong to a trust, then you might be able to avoid the typical probate headaches of large estates.
A property can avoid probate when the right of survivorship protects it. While this is typically for homes shared by married couples, not every state recognizes such joint ownership. Therefore, you will need to check local regulations. However, if the property is jointly owned, it is beneficial to note that this ownership may supersede any will request. For example, if a father dies, leaving the home to his children, but he is survived by his wife who also lives in the house, then the wife would get the property, and the children would be potentially disinherited.
Also, a property may share tenants-in-common. While technically still joint ownership, the decedent must stipulate that the property goes to the other owner in their will. If no such stipulation is made, then the property will be distributed among the decedents family. Although, in the instance of no will, probate will likely be required.
There are certain assets, financial accounts mostly, that allow an account holder to name a beneficiary. By designating this person, the decedent ensures a quick transfer of ownership upon their death. However, there are several ways that a financial asset can still end up in probate.
- Beneficiary dies before or at the same time
- Beneficiary is incompetent or incapacitated
- Beneficiary is listed as “my estate” without further explanation
- Beneficiary is a minor
Trusts are excellent financial tools, and if set up correctly can help survivors avoid probate court. For example, a revocable trust is considered a living trust, and it can be changed throughout the owner’s life. Revocable trusts can also avoid the hassles of probate. However, a testamentary trust only goes into effect after the owner dies and must be reviewed by a probate court for approval.
Assets do not always have to go through probate for beneficiaries to take ownership. However, without proper preparation, many family members will have to go through probate proceedings. Therefore, hire an estate planning attorney and get your assets in order.