Are you surprised to learn that Americans spend nearly $2 billion on probate every year? In fact, more than half of Americans have not written a will or built an estate plan, and this figure is significantly higher for African and Hispanic Americans (68% and 74%, respectively)
Unfortunately, the probate process often occurs right in the middle of your grieving process. As you work through the legal process of distributing your loved one’s assets and debts, these are a few things you should know.
What goes through probate?
You need to go through probate for most assets that are in the name of the deceased. A judge distributes the deceased’s assets based on the will’s directions. If a will is not available or does not cover some assets, state law will determine who receives them. The probate process also addresses the deceased’s debts.
Assets that are not subject to probate
Any asset in a revocable living trust is not subject to probate. In addition, most banks, retirement accounts, pensions, insurance companies and financial accounts allow their clients to list a beneficiary, which avoids probate. Instead, the funds in these accounts are automatically distributed upon death.
In addition, assets that have joint ownership, from businesses to real estate, are typically automatically awarded to the co-owner(s).
You can request that the court grant your request to avoid probate if a will is not present. However, these requests often depend on the heirs’ agreement on the distribution of assets. You may have to get creditors’ consent to avoid probate.
To learn more about probate and how to make the process as painless as possible, consult your friends and family members who have gone through the process.