Many common assets, including real estate and retirement accounts, won't need to go through probate.
If you need to take an estate through a probate court proceeding, don't despair. It doesn't necessarily mean that every single thing the deceased person owned will have to be included in the probate process. That's good news because any property that doesn't need to go through probate can be transferred to inheritors much more quickly.
Assets That Might Need to Go Through Probate
As an initial question, ask how the deceased person owned a particular asset.
- Did the deceased person own it solely—for example, real estate or a car titled in the deceased person's name alone?
- Or did deceased person own the property jointly, with someone else? If so, what type of co-ownership is listed on the deed or other title document—for example, "as joint tenants with right of survivorship" or "as tenants in common"?
If the property was owned with someone else with the "right of survivorship," (such as with "joint tenancy with right of survivorship" and with "tenancy by the entirety"), it won't need to go through probate because when one co-owner dies, the surviving co-owner automatically inherits the entire property, completely outside of the probate process. But if the asset was owned without the right of survivorship, for example as "tenants in common," it might need to go through probate court.
Example: Maya co-owns her home with her partner Jamie as joint tenants with right of survivorship. When Maya dies, her home won't need to go through probate. Upon her death, Jamie owns the entire house. (For more on how Jamie would officially transfer title from Maya and Jamie to Jamie alone, see Transferring Joint Tenancy Real Estate After a Death.)
Example: Neil co-owns a warehouse with his brother Damien as tenants in common. When Neil dies, his share of the warehouse may need to go through probate before it is passed to the person named in Neil's will (his daughter Ellie).
For property that was owned alone, or that was co-owned without right of survivorship, you might very well be looking at probate in its future. But many common categories of property that will skip probate, discussed next, so first check if the property falls into one of these categories.
Assets That Don't Need to Go Through Probate
Even if property was owned solely or co-owned without survivorship rights, it might still be able to skip probate. If the asset falls into one of the following categories, it won't need to be tied up in probate court.
Here are common types of assets that avoid probate:
- Retirement accounts—IRAs or 401(k)s, for example—for which a beneficiary was named
- Life insurance proceeds (unless the estate is named as beneficiary, which is rare)
- Pension plan distributions
- Property held in a living trust
- Funds in a payable-on-death (POD) bank account
- Securities registered in transfer-on-death (TOD) form
- U.S. savings bonds with a named beneficiary or co-owner
- Real estate subject to a valid transfer-on-death deed (available only in some states)
- Cars or boats registered in transfer-on-death form (allowed only in some states)
- Wages, salary, or commissions (up to a certain amount) owed to the deceased person (in some states)
- Vehicles that go to immediate family members under state law (in some states), and
- Household goods and other items that go to immediate family members under state law (in some states).
If the deceased person actively made an estate plan and took steps to avoid probate, you might find that the estate doesn't need to go through probate at all. For example, if the person made a living trust and transferred most or all property to that trust, you might find that you can skip the hassle of probate court.
Some Estates Qualify for Simplified Probate Proceedings
Even if some of the deceased person's property enters probate, nearly all states offer simplified probate proceedings for what are called "small estates." These estates pass through probate more quickly, saving the estate time and money. Each state has different rules for what is considered a "small estate," and the rules and limits range widely.
If your state imposes a maximum value for small estates (for example, estates under $20,000 or estates under $200,000), and the estate you're dealing with is larger than that amount, you might still take the time to calculate whether the estate qualifies. That's because you don't count all property owned by the deceased—only the property subject to probate.
Example: Kylie dies and leaves behind a $400,000 house that's jointly owned, a $200,000 bank account for which a payable-on-death beneficiary has been named, a $100,000 IRA, and a car worth $10,000. The estate has a value of more than $700,000, but the only probate asset is the car—and it $10,000 value qualifies it for a small estate procedure in most states.
To find out the small estate rules in your state, see Probate Shortcuts in Your State.
If you do find that the estate contains assets requiring probate court proceedings, it's the responsibility of the executor named in the will to open a case in probate court and shepherd it to its conclusion. If there's no will, or the will doesn't name an executor, the probate court will appoint someone to serve. Either way, the person in charge can hire a probate lawyer to help with the court proceeding, and pay the lawyer's fee from money in the estate.
