Tips for Avoiding Probate

Here is today’s bit of cocktail party knowledge: “Probate” is derived from the old English process of “proving” a will. Imagine times when people carried swords, ate turkey legs and fought dragons (I know…but blog posts are more interesting when they include dragons, right?) Someone dies, and a bunch of family members and friends claim that they are entitled to their material possessions. At a time when most people could not read, much less write, how did they sort out who could control the distribution of those possessions? The local noble would hold court, at which there would be a “proving” of the will. Much has changed since those times (not the least of which is our current lack of dragons) – but the passing of possessions between family members, in a peaceful manner is the entire point of our current probate process.

What Does Probate Mean?

This is a simple question with a sometimes-confusing answer. Probate is the legal process that occurs after someone (decedent) dies. This legal process is overseen by a judge. In Georgia, there is a specific court in each county that handles this process – the probate court. Probate includes multiple steps, court appearances, and attorneys.
Generally, the steps to probate involve proving in court that the decedent’s will is valid and then identifying and inventorying the decedent’s property – both real property, such as a home, and personal property, such as jewelry or a coin collection. Next, the property will be appraised to determine the value of the estate. Then any outstanding taxes or debts will be paid off. Finally, the remaining property in the decedent’s estate will be distributed either according to their will, if it has proven to be valid, or according to state law if there is no will or if the will has not been proven valid.
This process typically involves substantial amount of paperwork, court appearances, and the involvement of lawyers. The purpose behind probate is to ensure the decedent’s debts are paid and the assets of the decedent’s estate go to the correct beneficiaries. The state of Georgia has an interest in making sure that title to real property is properly recorded, and that motor vehicles are properly maintained and titled. And, of course, the decedent’s loved ones want to make sure that the decedent’s assets are transferred in accordance with the decedent’s wishes.

How Much Does an Estate Have to Be Worth to Go to Probate?

An often-repeated question is, “My estate isn’t worth much, does it still have to go through probate?” The default rule is that all estates must go through probate UNLESS some sort of planning techniques have been employed that would make probate not necessary.

In some states, a small estate affidavit can be used to bypass probate if there are very few assets and few, if any, debts. Georgia does not have a small estate process, but it does have a No Administration Necessary option. However, this process requires all interested parties to sign off on the use of this process. “Interested Parties” means heirs, but it includes creditors. I am sure you can imagine the difficulty in getting creditors to agree that no administration is necessary, since debts of the deceased can only be paid out assets of the estate. So, if there are any debts of the estate of any kind, no matter how small, it is unlikely that No Administration Necessary will be a successful option.

Is Probate a public proceeding?

Yes. Filing a petition in probate court is the start of a public proceeding. In the past, the “public” aspect was somewhat limited. After all, to discover details of a proceeding someone would have to comb through numerous paper files in the records of the courthouse. The paper files may not contain the details that a person may be interested in, so they may even have had to attend probate hearings to discover what was going on.
Times have changed. Many court records are kept in electronic form in searchable databases open to the public. Probate court proceedings have always been open to the public, but now many courts broadcast those proceedings over the internet. “Public” 20 years ago was very different than “Public” is today!

Can you avoid probate court?

Yes, you can avoid probate. One great option is the creation of a revocable living trust. A revocable living trust will allow a person to transfer their assets into their trust, while they are alive. That person will be the trustee of the trust, which means that they will always have access to their possessions and will not be restricted in the use or management of those assets in any way. Since the trust survives your death, the assets held by the trust can pass to your beneficiaries without any court interference or probate. This is quicker and simpler, and happens without the oversight of any court.

The second option for avoiding probate is to utilize beneficiary designations on assets. Many assets such as bank accounts, retirement accounts, investment accounts, and some personal property can have beneficiary designations. Often these beneficiary designations are described as payable-on-death or transfer-on-death. They both have the same end results just different names depending on the asset. A beneficiary designation allows the beneficiary of the asset to provide a death certificate and depending on the type of asset some follow-up information and then title is passed to them. In this way beneficiary designations also avoid probate.

Another option is to utilize beneficiary designations on assets. Many assets such as bank accounts, retirement accounts, investment accounts, and some personal property can have beneficiary designations. Often these beneficiary designations are described as payable-on-death or transfer-on-death. They both have the same end results just different names depending on the asset. A beneficiary designation allows the beneficiary of the asset to provide a death certificate and depending on the type of asset some follow-up information and then title is passed to them. In this way beneficiary designations also avoid probate. However, beneficiary designations are not useful for most material assets. As a result, even if some assets can be passed without a probate proceeding, your loved ones may still end up in probate court in order to transfer your remaining assets. Beneficiary designations are a useful tool, but are not comprehensive planning.