What is Probate?
Posted: October 8, 2017
Probate is a court supervised process that makes sure a decedent’s bills are paid appropriately, assets are inventoried and distributions are properly made.
A will is the primary probate document that tells the probate court who the decedent wanted to act as Personal Representative and who should receive any assets that might remain after the decedent’s creditors are paid.
Drawbacks of probate can include:
1. Lack of privacy (documents filed are typically public record),
2. Increased expenses (probate typically involves court fees and attorney’s fees), and
3. Lengthy proceedings (probate can take a long time to complete).
4. Sometimes probate may be beneficial for an estate. For example, the formalities of a probate proceeding might be helpful if dealing with disagreeable beneficiaries.
Unless there is a reason someone specifically wants their estate to go through probate, they often wish to avoid probate.
There may be more than one way to avoid probate, depending on the details of the estate, such as:
1. Putting beneficiary designations or payable on death designations on all assets, and/or
2. Transferring assets to a revocable living trust.
1. If a bank account is titled in an individual’s name (without a payable on death designation) and that person dies, the bank will not allow anyone access to the account until the probate court appoints a Personal Representative (although there is an Affidavit that can be completed as an alternative for certain Wisconsin small estates less than $50,000).
2. If the bank account had a payable on death beneficiary on file with the bank, then the account will be transferred directly to the named beneficiary upon the account owner’s death. However, this can be problematic if the estate needs the funds to pay bills, or if the named beneficiary is deceased.
3. If the bank account was titled in the name of a revocable living trust instead of being owned by an individual, the account owner cannot die (because a trust does not “die”). Upon the death of the individual who established the trust, the successor Trustee named in the Trust Agreement can go to the bank with a death certificate and a copy of the Trust Agreement indicating they are the successor Trustee. The successor Trustee should then have access to the account without any need for probate.