What is Probate?
Probate is the court process of distributing / retitling property after someone dies.
A probate case is started with the county court. During the case an inventory of assets is filed with the court, notice will be provided to creditors (might require publication in a newspaper), property is distributed to the rightful heirs or persons named in a Last Will and Testament (Will). The court process will likely take 6-12 months or longer if real estate is involved, heirs are difficult to find, heirs are fighting, etc.
There are court fees, publication fees, executor/administrator, and attorney fees associated with probate.
Is Probate Necessary?
Generally probate is necessary when:
- Property is not in a Trust
- No beneficiary was named
- Beneficiary named predeceased the owner
- Beneficiary is a minor
- Transfer on Death Deed beneficiaries are disagreeing about what do with property
- Heirs are fighting about property
- Heir cannot be found
- Total assets are over $75,000 in Kansas or $40,000 in Missouri
What are Non-Probate Transfers
Non-Probate Transfers allow your property to legally transfer without going through Probate. Non-probate transfers are effective estate planning tools for some estate plans. They can work well for people who are leaving all their property to the same person, such as a spouse.
The downfalls of non-probate transfers:
- Do not assist you during your lifetime if incapacitated or no longer competent to make decisions
- Do not avoid probate if the beneficiary named has already passed away
- Only work if a beneficiary is named – any property without a beneficiary will likely need to go through probate
Examples of Probate Avoidance:
Revocable Living Trust:
Revocable Living Trust is an entity which owns assets for the benefit of a beneficiary. Property owned by the trust avoids probate. This option also allows the trustee you name to handle the finances in the trust once you are no longer competent or lack the capacity to handle your financial affairs. The Trust assists you during your lifetime and assists with distributing assets after your death.
Joint Tenancy:
Joint Tenants with Rights of Survivorship is a type of ownership by two or more people in which each owns an undivided interest in the entire property. Many times spouses will own real estate as joint tenants with rights of survivorship.
Listed Beneficiary:
Listed Beneficiary is a person named on a policy or account to receive funds after your death. A beneficiary is usually listed on retirement accounts and life insurance policies.
Payable on Death Designation:
Payable on Death Designation is a designation on an account. Many times this designation is on bank accounts or vehicles.
Transfer on Death Deed / Beneficiary Deed:
Transfer on Death Deed is a deed prepared to allow your real estate to transfer outside probate. The deed is filed before your death and can be revoked during your lifetime.
At your Empowering Estate Education Discussion we will help you determine the best estate plan strategy for your property and family.