Probate is the legal process of settling a deceased person’s (“Decedent”) last issues (debts owed, taxes due, who were his heirs, what property was solely his on death) and then distributing all remaining property to the heirs at law, or the persons named in the Decedent’s valid Last Will and Testament. The process is usually viewed as a necessary evil and takes anywhere from six months to two years to complete with the Court and attorneys usually in control throughout.
But probate can be avoided, all it takes is some planning while you are alive.
A revocable living trust is the most effective way for a family to avoid probate after death. An individual places assets in a trust, and all assets within the trust avoid probate. The trust passes on to the persons named by the creator or grantor. This technique, when properly maintained, allows all property to skip probate, and allows the grantor to ensure his guidelines or restrictions last well after he passes away.
Payable on death designations on banking and financial accounts (and now real estate in Oklahoma) allow a person to designate a beneficiary to receive the particular asset. This allows the property to go straight to the named beneficiaries without court involvement.
Joint tenancy with rights of survivorship is perhaps the most commonly used estate planning technique. This involves naming another individual (or more) as a current owner on property, but also stating that if you die, your interest in the property automatically transfers to the other named joint owners. This is commonly used between husband and wife and works well, but it really is just a way to delay probate, not to avoid it.
Gifting property is another way to avoid probate. I met with a nice family just today that wanted to know what all they had to do to probate their mom’s estate. My first question to them was, “What property did she have in her name when she passed?” Their answer was only a checking account, but it was POD to the daughter. She had gifted all of her other property (house, land, other cash) to her children about a year before. They were happy to hear that a probate was not needed, because there wasn’t any estate to be administered.
All of these options have positives and negatives. Some of them, in my view, have way more positives (the revocable living trust), and some have way more negatives (joint accounts subject your property to other owners’ creditors). The best way to know what is best for you and your family is to come in and talk with a qualified estate planning attorney.