We sometimes have clients who come in saying something like, “I want to avoid probate. I need a Will.” Many people incorrectly assume that having a Will is what they need to avoid probate. That is simply not the case.
So what is probate? Probate is the court process of settling a deceased person’s estate.
It comes in two forms: intestate or testate. Intestate means that the decedent died without a Will. Therefore, state law determines what happens to the assets. Testate means that the decedent died with a Will, so that the court must follow the provisions of the person’s Last Will.
So what happens if one dies without a Will? The court follows what is called intestate succession.
If the decedent is married at death, all assets go to the surviving spouse, unless:
1. The decedent had lineal descendants not with the surviving spouse. In this case, 1/2 of the estate goes to the surviving spouse, and the other 1/2 to the decedent’s lineal descendants per stirpes (more on this term in a future episode). OR
2. The decedent had all of his or her lineal descendants with the surviving spouse, and the surviving spouse had lineal descendants not with the decedent. In this case, 1/2 of the estate goes to the surviving spouse, and the other 1/2 to the decedent’s lineal descendants per stirpes.
If the decedent is single at death, then the estate goes equally to the decedent’s lineal descendants. If there are no such descendants, then the estate goes to the decedent’s mother and father equally, or to their survivor if one has passed. If none of the above applies, then the assets are divided equally among the decedent’s brothers and sisters.
To summarize … in order to avoid intestate succession, where the State dictates what happens to your assets, you need a Will. So having a Will is a very good thing, but it does not avoid the court probate process.
So how does one avoid probate? The simple answer is this: you must own or control all of your assets in such a way that on your death, no asset is owned in your personal name, i.e., there are no probate assets.
There are many estate planning strategies for avoiding probate, and each person should discuss his or her situation with an estate planning lawyer. One of the major strategies is the Revocable Living Trust. We will go over this and several other probate avoidance strategies in our next episode.
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