Many times I am asked “What is the purpose of Probate and how can I avoid it at my death?”. Well, Probate is not something that just automatically occurs. The Probate Police will not be at your loved one’s door immediately following your death. Probate is merely a court process that overseas the transferring of your assets. The main purpose of Probate is to transfer the assets out of a deceased person’s name and into the name of the living. To better understand this concept, think of how you would transfer the title of your house currently. If the house is in your name and you want to transfer title, you would merely sign the Deed/Title which places the house into another person’s name. Now say that you are deceased. Who has the power to sign that Deed? The Probate Court is the only institution available to us that can appoint someone that is authorized to sign in the place of a deceased person. This person is appointed within the Probate Court process and is commonly referred to as a Personal Representative in the State of Wisconsin. Many other States describe this position as the Executor. This position will be appointed whether or not you have a Will in place at the time of your death.
So the main purpose of Probate is to transfer assets out of the deceased person’s name into the name of the living. What if a person dies with no assets in his/her name? Simply put, there will be no Probate proceeding necessary. The Probate proceeding typically starts because a loved one discovers that they cannot access a bank account that is in the name of the decedent. They go to the bank to try to access the funds and the bank tells them that they are unable to pass the funds to them because there is no court order authorizing and appointing this person as the Personal Representative. This court order is commonly called Domiciliary Letters or Letters of Testamentary. The place to get this court order or these letters is the Probate Court. Therefore, the trick of avoiding Probate is to make sure you die with assets that do not fall to the Probate system. This does not necessarily mean that you die with no assets at all. Rather, in some other legal way you have indicated on the title to your assets or by virtue of a beneficiary designation who gets this asset upon your death. Your Will, of course, describes who receives your assets upon your death. However, if you are depending on a Will to pass the assets to your loved ones, your estate must go through the Probate process. To learn more about how to effectively title your assets to avoid Probate, read the below listed resource titled Your Estate Planning Suvival Kit. If you have a story regarding titling an asset that you would like to share, please comment to this blog.
- How Estate Planning for a Family May Trap the Unwary Practitioner - September 21, 2022
- What Everyone Should Know about the New FDIC Regulations - September 13, 2022
- The Inflation Reduction Act - September 8, 2022