When is probate actually essential? is a question that an estate planning lawyer is frequently asked. The precise laws of the state where you reside at the time of your death, as well as the laws of any other states where you hold real estate, will determine the answer, as with many other estate planning queries. The following is a list of the situations in which an estate might require probate.
Assets Held in the Name Only of the Decedent
The majority of the time, property owned by the decedent in their sole name, without any additional joint owners or a payable on death indication, must go through probate in order to transfer ownership to the decedent's beneficiaries. A motor vehicle is an exemption in some states. For instance, a vehicle can be given to the decedent's heirs at law in Florida and Tennessee without the need for a probate estate to be opened. 12 In addition, some states offer a streamlined procedure for "small estates" that is far quicker than a traditional probate administration. A tiny estate in Florida is one that is valued at $75,000 or less.Assets Held under Tenancy-in-Common
In most circumstances, the decedent's tenant in common share will need to be probated in order to transfer it from the decedent's name to the names of the decedent's beneficiaries if the decedent owned any property in their own name as a tenant in common with others. As long as the tenant in common's fractional share is valued below the applicable state's small estate threshold, the "small estate" approach previously discussed also applies to tenants in common. It should be noted that the interest won't need to be probated if the tenant in common was retitled into the name of the decedent's Revocable Living Trust prior to the decedent's passing.Beneficiaries who have passed away or who have not been designated
If the decedent had a payable-on-death or comparable type of account, a Health Savings or Medical Savings Account, a life insurance policy, a retirement account, such as an IRA or 401(k), or an annuity, and all of the named beneficiaries of the account or policy had passed away before the decedent, or if the decedent had made no designation for beneficiaries at all, then the account or policy will typically need to be probated in order to be transferred into the names As long as the account or policy's value is below the appropriate state's small estate cut off threshold, the "small estate" process outlined above also applies to accounts or policies without a recognized beneficiary.The Decedent's Last Will and Testament Was Invalid
The majority of the time, assets must go through probate in order to transfer them from the decedent's name to the names of the decedent's heirs at law if the decedent didn't have a valid last will and testament at the time of his or her death and one or more of the circumstances mentioned above apply to the decedent's assets. As long as the value of the decedent's possessions is below the applicable state's small estate threshold, the "small estate" approach outlined above also applies to an interstate estate.The decedent's last will and testament was valid
If one or more of the aforementioned circumstances apply to the decedent's assets, even if the decedent had a valid last will and testament at the time of their death, probate will It will typically be required to transfer the assets from the decedent's name to the names of the beneficiaries listed in the will. As long as the value of the decedent's property is below the appropriate state's small estate threshold, the "small estate" approach previously discussed also applies to testate estates.