I Have a Will – Does This Mean I Can Avoid Probate?
While much of the law is a gray area far from black and white, the answer to this question is most definitely “NO”. The very purpose of a Will is to enter an estate into probate. Sometimes, I think that the probate process has undeservedly developed a very bad reputation! While a heated Will contest or other litigation can certainly delay the probate of an estate, most probate matters are allowed on an uncontested basis within a reasonable time.
That said, there are ways to avoid probate if that is a goal. Here are three means of probate avoidance that clients frequently utilize:
- Jointly Owned Assets: Assets that are jointly owned by the Decedent and another person are not part of the Decedent’s estate and will not pass through probate. Instead, the survivor of the two automatically becomes the sole owner of that asset upon the Decedent’s death. Common examples of jointly-owned assets include bank accounts and real estate (regarding real estate, the tenancy has to be a “joint tenancy” or “tenancy by the entirety”; a “tenancy in common” does pass through probate).
- Assets with a Named Beneficiary: The most common examples of such an asset are a life insurance policy or an investment account, such as a 401K plan. If the Decedent, during life, had executed a beneficiary designation form naming a person or an entity (such as a trust) as the beneficiary of the policy or plan, that asset will not be subject to the Decedent’s Will but will instead pass directly to the beneficiary, who must complete paperwork and submit a certified copy of the death certificate before receiving the funds. If no beneficiary is named, the asset then becomes part of the probate estate.
- Assets Owned by a Trust: In general, any assets that have been formally transferred into a trust by the Decedent are no longer owned by him or her but instead become the property of the trust. The trust document itself, not the Decedent’s will, specifies how those assets will be eventually distributed. Many clients who would like to avoid probate use trusts as they have other benefits, such as leaving assets to minor children or providing the privacy that a publicly available probate case cannot.
The bottom line is that a Decedent’s Will governs only assets that are in the sole name of the Decedent at death. Only a Personal Representative who has been appointed by the Court can access those assets. The purpose of executing a Will is to nominate a trusted family member or friend to serve as the Personal Representative and to direct how the Personal Representative should distribute those assets after death.