A common issue that pops up with family members after someone dies is “do we need to go through probate?” To answer that question, there are series of follow-up questions to be answered first. To start the process, you should have a list of the assets in front of you and go through a “filter” process of the following questions.
Question 1: Is there a named beneficiary for the assets? Do any/all of the assets have a named beneficiary? For example, life insurance and annuities typically have a beneficiary. Is there a POD (Payable on Death) or TOD (Transfer on Death) beneficiary? If the answer is “yes” to all the assets, then you are done. Go straight to the claims process and pass probate. If the answer is yes to some, but not all, we move to the next question. (If the beneficiary is the “estate”, then that doesn’t count but doesn’t necessarily mean you have to go through probate.)
Question 2: Is there a surviving joint owner? Next question is whether there is a surviving joint owner on the remaining account(s). While this can create some problems, if the rest of the accounts have a joint owner, you can skip probate. If you still have assets that don’t have a named beneficiary or a joint owner, then you move to the next question.
Question 3: Is there a funded revocable trust? If the decedent established a living (revocable) trust and properly titled the remaining assets, then you can avoid probate and just have the trust administration to deal with those assets. You can end the analysis here.
Question 4: Is the total value of remaining assets less than $25,000.00? Other than the joint assets and those with named beneficiaries, and assuming no real estate (land), do those assets total less than $25,000.00? If so, you can use an affidavit to transfer all of those assets. For example, if there a checking account of $1,500 and a savings account of $10,001 you would be able to take a completed affidavit of distribution to the bank and they will cut a check out to you. You should contact a trust & estate (T&E) attorney (me) to help with preparation of the affidavit to provide to the financial institution.
Question 5: Is there real estate involved for the remaining assets? If there is real estate involved, whether it is a small home or if it is a sprawling farmland, probate is your new best friend. Contact a T&E attorney and get the process going. However, if it has been more than 5 years since the decedent passed, you have another option that I don’t feel like getting into right now.
If you get to the end of the process and it appears that you need to go through the probate process, the world does not end. There are some other issues (Medicaid estate recovery and small estate vs regular estate) that need to be determined. Also, just because you don’t have to go through probate doesn’t mean that you may not have some other issues to deal with for the estate. (taxes, such as income, inheritance or estate, plus Medicaid liens) A good probate attorney (ahem…you should know who fits that category by now) will be able to walk you through the process. Also, if you had a power of attorney, it is now worthless. Stop using it immediately.