A Last Will and Testament ( a “Will”) is an important document, and every estate plan will include one. However, the idea that a Will can help someone avoid probate misunderstands the process. There are ways to avoid probate, but it’s not done through the Will.
To understand more clearly, we should start with what probate is. Probate is the court-directed process for the transfer of the property within a deceased individual’s estate to their lawful beneficiaries. The Will is the focal point of the probate process. Assuming that the deceased individual leaves a Will, the court’s role in probate is to validate the Will and appoint an executor or administrator who will assume the responsibility of facilitating the distribution of property as outlined in the Will.
So a Will isn’t used to bypass probate. It is in fact the instrument at the center of the probate process. If your goal is to avoid probate, an estate planning attorney can help you create trusts or other mechanisms that transfer assets directly to your intended heirs or beneficiaries before or upon your death. Generally, this is done by moving property out of your name and into a trust or other entity that you maintain some level of control over, but which is legally separate from yourself and your estate. At that point, the ownership of the property and its future distribution is controlled by the entity’s governing document, usually a trust agreement. You can serve as the trustee during your lifetime, and upon your death, your successor trustee takes over, distributing assets according to the trust’s directions.
As mentioned previously, even if you use a trust to avoid probate, your estate plan will still include a Will to provide a back up in the event that there is property remaining in your estate at death. A “Pourover Will” is drafted to transfer the remaining property to your trust if it is necessary.
Another effective way to avoid probate is by designating beneficiaries for accounts like life insurance and retirement funds, as the named beneficiary receives assets directly upon your death. Some assets can be titled as “Payable on Death” (POD) or “Transfer on Death” (TOD), which designates beneficiaries and bypasses probate. However, not all financial institutions permit these designations. TOD deeds can be used for real estate or vehicles.
Probate costs and timeframes differ significantly depending on the state. In some places, like Texas, probate is relatively quick and affordable, while in others it can be expensive and time-consuming. One consistent aspect of probate, however, is that a probated will becomes part of the public record, allowing anyone, including creditors, ex-spouses, or estranged children, to access and read it.
If you or a loved one needs probate or estate planning assistance, please do not hesitate to BOOK A CALL using our calendar. We are here to help.