Probate is a court-supervised process of transferring assets after a person dies. Assets subject to probate do not include those that were payable to a named beneficiary (e.g., life insurance), owned by a trust, or owned jointly with rights of survivorship (e.g., joint bank account between spouses). Anything not directed to another person upon death may become subject to probate.
Formal administration, which is the most common probate proceeding, typically takes approximately one year to resolve. Due to the time and legal expenses involved, it is advisable to craft an estate plan that avoids probate.
To avoid probate, an individual planning his or her estate should discuss with an attorney the proper way to title assets in multiple names or placing assets within a living trust. By titling all assets with multiple names (in the proper manner, so as to provide automatic transfer to the second owner upon death of the first), probate can be avoided.
A properly funded living trust can hold a person's assets and often can be administered without court intervention. The process is technical, and you are encouraged to get counsel to assist so as to best ensure avoiding a probate proceeding.
Although many dread probate proceedings, there may be advantages to court supervision. For example, the probate process allows for an estate to clarify what creditor claims exist and cut off claims of lazy or careless creditors.
In the court proceeding, a "notice to creditors" is filed, allowing a 90-day period for creditors to file claims against the decedent's assets.
If claims are not filed within the 90-day window, they are forever barred.
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