Does Probate Fall Under Estate Planning?
You may hear the term “estate planning” and immediately think of trust funds from ultra-wealthy individuals. However, the truth is much more commonplace. So, does probate fall under estate planning, and if so, how?
If you have a bank account, car note, or even a modest mortgage, you have an estate. And unless you plan, your loved ones may be left to navigate probate court during one of the most difficult times in their lives.
That’s why understanding the relationship between probate and estate planning is crucial. Here’s what you need to know.
What Is Probate in Estate Planning?
Probate is a legal process that happens when someone dies. It involves validating the deceased’s will, paying off debts, identifying assets, and distributing remaining property to heirs. When you ask, “Does probate fall under estate planning?” you’re asking about the role this process plays in how a person’s assets are managed and passed on.
Estate planning describes the steps a person takes to organize their assets before death or incapacitation. It involves outlining how property will be handled and distributed, often involving critical components, such as:
- Writing a will
- Setting up trusts
- Naming beneficiaries
- Assigning powers of attorney
- Creating health care directives
Probate is one aspect of the estate planning process that requires careful consideration of its complexities. Speak to an estate planning attorney at the Nicole Pavlik Law Firm today to learn more.
Understanding the Significance of Probate in Estate Planning
Passing away without a valid estate plan can be disastrous. Your assets don’t magically transfer to your loved ones and may instead go through probate court. There, a judge can help determine how to divide your estate based on your will (if applicable) or, if not, according to state laws of intestacy.
This time-consuming process can take several months or even years, may cost thousands in court fees and legal expenses, and create public records of your estate. It can also cause legal disputes between loved ones and family members. These risks mean the central goal of an estate plan is to directly address probate by preparing for it or taking legal steps to avoid it.
What Assets Go Through Probate?
Not all assets require probate. For example, property titled solely in your name, personal belongings, and a bank account with a named beneficiary are often included. However, assets that typically avoid probate are:
- Jointly owned property (with rights of survivorship)
- Life insurance policies
- Retirement accounts
- Payable-on-death (POD) accounts
- Transfer-on-death (TOD) accounts
- Assets held in a trust
An estate planning attorney can help you sort out the details and determine which assets fall into which categories. Contact the Nicole Pavlik Law Firm to get started.
Common Misconceptions
Did you know that a will must be valid and executed through probate? It gives the court guidance on what you wanted. Also, probate might not be a big deal for small estates, but it can involve a long, drawn-out process for larger estates.
Although most people want to avoid probate altogether, it can help ensure debts are paid in an orderly manner and provide oversight to prevent fraud or misappropriation of funds. Probate in estate planning can also help resolve disputes among heirs when additional clarity is required.
Don’t Leave Your Estate in the Hands of the Courts
Here are your next steps:
- Review your beneficiary designations.
- Consider creating a trust.
- Talk to an estate planning attorney.
We are here to make sure you don’t just plan — you do it well. Reach out to schedule a confidential consultation today.