When Jenny Wright's mother died of bladder cancer in 2016 the loss was traumatic enough. But to make it worse, her most recent will was from 1987 when Wright and her brothers were still minors.
"Unfortunately, whatever the most current will says is what they go with, even if it was from 1987," the Augusta, Georgia, resident explains via email. The will was obviously sorely outdated. "It was also written when my parents were still married, and the executors were old financial advisers who are now retired (and living in another state). Getting them to sign away their executive privileges wasn't hard but tracking them down was quite a challenge!"
Probate refers to the legal process for wrapping up the estate of someone who has died. Probate court is where people go to address legal concerns about a dead person's estate. "For example, you would end up in probate court if you want to contest (fight) the validity of a will or if you want to claim part of an estate as a creditor," says Betsy Simmons Hannibal, a lawyer specializing in estate planning and a senior editor for Nolo, via email.
A lot of people don't like to think about their impending death, which is why many estates go unplanned. In fact, only about 55 percent of people age 55 and older have a will in place, according to a 2018 study by Merrill.
If your loved one left a will, this goes before a probate judge who determines whether it's legal. If it's determined that it is, then the executor (who's named in the will) gets to work ensuring that the terms of the will are carried out, seeing that the assets go to the intended beneficiaries and any debts are paid. It's a fairly straightfoward process assuming no one contests the will. Problems arise when a person dies intestate (leaving no will) or leaving a very outdated will, as happened to Jenny Wright. Experts recommend that you get your estate in order so that loved ones don't have to deal with the significant hassle of going through probate court.
"A typical probate process requires specific amounts of notice to creditors, long waits on the backed-up court calendar, and many separate steps — and the estate is usually paying a lawyer every step along the way," Simmons Hannibal says.
In fact, depending on the size and complexity of the estate, probate can take anywhere from nine months to two years to settle, at a cost of 5 to 10 percent of the value of the assets in fees.
How to Avoid Probate
A little effort on the front end will help prevent headaches for your heirs and will make sure that all assets wind up where you want them. There are a few probate-avoidance estate planning tools available:
Living Trust: This is the most commonly used tool to avoid probate, according to Simmons Hannibal. Living trusts can designate beneficiaries and instruct where all property and assets should end up without having to get probate involved (unlike a will, which does have to go through probate). Things like who gets retirement money, investment accounts, valuable personal property, real estate and vehicles are typically spelled out in a living trust.
"They work well for people who have a significant amount of property that would otherwise go through probate (like a house)," Simmons Hannibal explains. "On the other hand, living trusts are more expensive and complicated to make and maintain than wills." For instance, it's generally recommended that you have a lawyer draw up a living trust for you, while you can do a simple will on your own, using an online form.
Beneficiary Designation: Some people turn to beneficiary designations instead of a will or trust if they want to assign through the asset itself. In other words, let's say you have a retirement account. Simply fill out the beneficiary form provided by the management company to designate a person or people to receive specific percentages of the assets. Then, upon death the funds are transferred. This is often also done for vehicles, asset accounts and securities, Simmons Hannibal notes.
"Additionally, many states allow you to make a transfer-on-death deed (also called a beneficiary deed) for your real estate. Property that passes through a beneficiary designation goes directly to the beneficiary without probate," she says.
Joint Ownership: When multiple people co-own property it often includes a right of survivorship deed, which allows that when one co-owner dies their property interest transfers to the other owner, no probate court necessary. "This can work well in some situations," says Simmons Hannibal. "But before you change your deed or other ownership documents to include a co-owner, consider the significant downsides, including reduced control of the property and possible tax repercussions."
You don't have to choose only one of these probate-avoidance solutions. "You can mix and match the tools you use to avoid probate. For example, even if you have a relatively high-value estate, you may be able to avoid the most challenging aspects of probate by transferring most of your property with beneficiary designations and transfer-on-death deeds," says Simmons Hannibal. "Your remaining property (like household or sentimental items) could then be transferred using the simplified small estate probate procedures."
Even if you have a living trust and use these other tools, you still need a will to cover things not addressed by them. For instance, naming a guardian for your minor children and giving instructions on how pay or forgive debts can only be covered by a will. Your heirs don't necessarily need to go through probate court if all your major assets have been assigned to people through living trusts and beneficiary designations.
What to Do if You Wind Up in Probate Court
Probate doesn't have to be a headache. "Most states have come up with shortcuts that make probate much quicker and less expensive," Simmons Hannibal explains. "For example, certain types of property (like property that passes directly to a spouse or property in 'small' estates) can often be transferred with a simple affidavit procedure that requires minimal court (or attorney) intervention."
Wright took much of the burden off of her family by retaining an attorney to deal with the probate process. "I was pleasantly surprised by how easily our attorney handled it," she recalls. "If it's affordable, I'd highly recommend hiring an attorney who specializes in estates and wills. They were able to help me navigate the ancient will and give me advice on all the subsequent steps, like closing bank accounts, selling properties, placing newspaper notifications for outstanding debt and prioritizing that debt."
Still, Wright cautions people not to put loved ones in the same position. "For anyone who thinks it doesn't matter if your affairs are in order or not, they're wrong," she says. "It's unfair to expect your siblings, spouse, or worse your children, to navigate the uncharted territory of post-death decisions and headaches while grieving the loss of a loved one. It's just too much."