While probate is necessary after almost every death, many people don’t know exactly what probate involves or what assets are subject to probate. You need to get the answers to these questions when you are making your estate plan, or if someone you love has passed away. Barbara M. Pizzolato, P.A. can provide assistance both to people who want to make a plan to minimize or avoid probate after their death and to people in and around Fort Myers who are going through probate after a family member has passed.
What Assets Are Transferred Through the Probate Process?
As a general rule, only certain property and assets must transfer through the probate process. For example, property that you own entirely in your own name would generally be transferred through probate. In addition, property that you share ownership of might also have to go through the probate process if you failed to execute a provision to ensure that the property transfers to co-owner when you die.
Monetary Assets Covered by the Probate Process
Determining whether or not monetary assets are transferred through probate can be complicated, but there are some basic guidelines that can help.
- A standard bank account in your name with no other accountholders would pass through probate.
- Standard investment accounts titled only in your name would also be transferred through the probate process because they lack any provisions for automatic transfer upon your death.
- A bank account or investment account that has joint title could pass outside of probate, as long as it titled appropriately and/or contains a provision that transfers ownership to the surviving accountholder when one of you dies.
- An account with a pay-on-death provision would also transfer outside of probate.
- If you have an insurance policy or individual retirement plan (IRA) that pays out to your estate when you die, those assets will be part of the estate and subject to probate. To avoid that, you can have those policies and accounts pay benefits directly to beneficiaries, ensuring that the payout belongs to them rather than to your estate.
Property Assets Covered by Probate
The titling of certain properties can affect whether assets transfer through probate or not.
- As a rule, if you have real estate interests that are titled in your sole name, that property is typically subject to probate.
- The same holds true for most property where you share title with another person as tenants in common, except in cases where the property qualifies as a homestead asset.
- If the property is owned as joint tenants with rights of survivorship, the property will transfer to the co-owners upon your death.
- Any property that you own with a spouse as joint tenants by the entirety will also pass outside of probate. When one spouse dies, the other receives the property automatically.
- Other valuables like art and jewelry can pass outside of probate, provided that you create some mechanism for automatic transfer in the event of your death; for example, through joint safety deposit boxes that transfer ownership upon death.
Why Would You Want to Avoid Probate?
The purpose of planning for your own death is to ensure that your loved ones receive the benefit of your hard work and investments. Probate is time-consuming and can be costly. As a result, many people want to avoid probate whenever possible. Surviving family members may prefer that assets be distributed using another process, since probate costs are paid by the estate – leaving less value to be shared by beneficiaries.
Common Probate Avoidance Options
In addition to owning assets that transfer automatically, there are several strategies that can be a part of your estate plan and that can help you to avoid probate.
One option is to establish a trust. With a trust, you transfer ownership of your assets into the trust while you are alive, and can even maintain control over the trust if it is structured properly. Alternatively, you can divest yourself of certain properties while you are still living, ensuring that your beneficiaries receive their inheritances exactly as you intend.
All of these options can present legal complications. Furthermore, a simple will is often not enough to ensure that probate is avoided and assets are transferred according to your wishes. To avoid probate, you often need a more comprehensive approach to estate planning.
Getting Help To Avoid the Probate Process
Barbara M. Pizzolato, P.A. can provide assistance to clients throughout Fort Myers who want to avoid the probate process. We also represent families during probate. Give us a call today to find out more about how we can help you.
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