Three Things You Need To Know About The Probate Process

After a loved one dies, it is common for the loved one's estate to have to go through probate. Probate is the process that involves administering any assets and paying any debts that the deceased had at the time of death. Assets are distributed according to a will or the state's inheritance laws.

Many individuals try to avoid probate due to the cost and hassle associated with probate administration. Check out a few things you need to know about the probate process:

1. Probate is Not Required for Every Single Estate

Some states permit estates that are under a specific dollar amount to pass from the deceased to those inheriting the deceased's assets without having to go through an official probate process. Probate can be complex and expensive, and it doesn't make sense to go through the process for an estate with only a few assets. 

However, if the deceased owned property, you may go through the probate process to take ownership of the property. Some states permit heirs to assume ownership without probate as long as they do not sell it and pay the property taxes. Check with an attorney who specializes in the probate process to see if probate is necessary.

2. There Are Legal Ways to Bypass Probate

It is possible to bypass probate entirely by utilizing certain types of accounts. Putting assets into a revocable living trust permits the original owner of the assets to have access to them while alive. After death, the assets pass to the trust's stated beneficiaries. 

You can also skip probate for your bank and investment accounts by naming an individual payable on death (POD). After your death, the named individual immediately takes ownership of the account without the need for probate. The person just has to show the bank proof of your death, such as a death certificate.

Owning property in a way that gives the right of survivorship also lets you skip probate. For example, some choose to own a home in joint tenancy with the right to survivorship. Whoever has the right of survivorship takes full ownership of the property once the other owner dies.

3. Some Accounts Do Not Have to Go Through Probate

There are some assets that pass outside of probate. Insurance policies go directly to your stated beneficiaries; if you are concerned about your loved ones having enough money to pay your final bills in a timely manner, owning an insurance policy is one way to make sure they have the funds they need.

As long as they have named beneficiaries, retirement accounts are also able to skip the probate process. Ownership passes immediately to whoever you name as the beneficiary.

You may be able to name multiple benefactors for your insurance and retirement accounts. For example, if you have two children, you could name each child as a benefactor who should get half of the insurance policy's proceeds. Contact a law office like Davis and Mathis for more information and assistance.