Probate is the process of proving a will’s validity, settling debt, and dispersing assets to heirs. When certain circumstances apply, probate may not be necessary. While the rules vary from state to state, The Balance offers a few examples of when probate is not applicable.
The proceeds of life insurance policies and retirement accounts are distributed to heirs via beneficiary designations. The asset owner fills in designations with the name of one or more heirs, as well as supplying the percentage of the asset they want to be dispersed to each listed beneficiary. When a person dies, these proceeds pass automatically to any heirs listed on the documents. As a result, accounts are not subject to the probate hearing.
The same process occurs when you own a property jointly with another person. Joint ownership prevents a person from including the asset in their will, as it will automatically pass to the second owner according to rights of survivorship. Additionally, if the person does include the asset in a will in an attempt to distribute it to a person other than the co-owner, the court would not uphold the will. Co-owners can be anyone, such as a wife, husband, child, sibling, or even family friend.
Unlike wills, living trusts are not subject to probate hearings. Once a trust is created, it must be funded by changing ownership of assets to the name of the trust. For example, a home title must be changed from the name of the estate holder to the name of the trust. Any items owned by the trust cannot be included in the probate hearing. An attorney can help you design an estate plan to offer the most protection to your estate.