If you’re asking how to avoid probate, you probably already know it’s a bear of a process.
This article gets into avoiding probate and whether or not you should, or can… or will… well, you get the idea.
What is probate, really?
Real quick. Let's start at the beginning.
Probate is the legal process of settling someone's estate after they die.
This includes validating a will if it exists, distributing their assets, paying any debts or taxes they may owe, and resolving any legal disputes that may arise. The estate's executor or personal representative (the person responsible for managing it) oversees the probate process.
In most cases, the probate process will take place in the state where the person died (technically domiciled). However, if they owned property in multiple states (known as ancillary estates), each state's probate court will need to be involved.
This gets tricky because probate laws differ by states (or provinces in Canada), and that makes getting accurate information tough.
Regardless of where it is taking place, probate tends to be a long and complicated process — we’re talking hundreds of steps and 500+ hours going back and forth between courts, heirs, and executors, and there are different probate levels of varying supervision and forms.
It is ideal to opt for the lowest level of probate required, the lowest being skipping it entirely. This cuts down the paperwork and gets inheritances in the hands of heirs faster.
The rest of this article is on skipping probate or not, but spoiler alert: most estates have to go through probate.
So if you’re still a bit fuzzy on probate and want clarity on what you’re getting into, you should definitely read these:
What is Probate (cool beginner’s guide with a timeline, responsibilities, levels of probate, etc.)
How to Succeed as an Executor of an Estate (list of steps, powers, mistakes executors make, etc.)
Do You Need a Lawyer During Probate (the title is pretty self-explanatory)
Why you should try to avoid probate
There are many reasons why avoiding probate, or at least opting for the lowest level, is the move.
It’s expensive and takes a long time
First, probate can be a lengthy and expensive process. If you have a large estate, it could take months or even years to settle your affairs through probate court.
The average is actually 500+ hours & $14k… which is pretty wild.
And generally speaking, the more assets and beneficiaries you have, the longer it takes.
Additionally, probate is a public process, which means that the details of your estate will become a matter of public record. If you are concerned about privacy, avoiding probate can help to keep your affairs out of the public eye.
It can cause disputes
If you have family members who are not on good terms, avoiding probate can help to prevent conflict and disagreement over your estate. You can save your loved ones time, money, and hassle by taking steps to avoid probate.
It delays inheritances
Beneficiaries don’t get their inheritance via the will until probate is finished. So if you have beneficiaries or heirs banking on inheritance money for big life decisions, they’ll have to wait until probate is done.
How To Avoid Probate
Unfortunately, you’re probably stuck with probate. Most estates can’t avoid it — it is a legal requirement for the vast majority of estates that have over certain (and low) thresholds for bypassing probate. These thresholds also vary by state.
So the only way to really “avoid” probate is to have enough assets classified as “non-probate” that the total value of your probate assets falls below your state’s threshold to qualify for a “small estate affidavit” or other equivalent. The exact jargon also changes by state.
Generally speaking, probate assets are solely owned assets like houses, IRA accounts, 401k accounts, personal property, vehicles, etc., and non-probate assets are assets in trusts, transferable-upon-death accounts (TOD), some jointly-owned assets, and life insurance policies.
We break all that down in our probate vs. non-probate assets guide, so give that a look.
If you’re planning your estate, your goal should be to set up ownership for assets that are classified as non-probate for as much of your property as possible — that way the total value of your “probate” assets after you die qualifies for lower levels of probate, or ideally bypasses it entirely.
If you are an executor, your goal is to figure out what assets the deceased had and figure out what category they fall into, therefore determining what level of probate you need.
And those classifications between probate and non-probate are set once someone passes, so unless they had a particularly small estate or did a really good job separating out their assets before they passed, chances are the family will have to go through probate.
Atticus Advice: If the deceased owned a house, you can bet you’ll be going through probate. The small estate affidavit thresholds are so low (usually below $150k in most states), that most people are instantly required to go through probate with a home on the table. If that’s you, then you should opt for the lowest level possible next. More on that here.
Specific Strategies for Avoiding Probate
For executor or personal representatives
Again, for executors or families looking to bypass probate, you need to look at the “small estate affidavit” threshold in your state. There’s more on that (plus more!) in our state probate guides.
Once you get that number, you can try to ballpark if your loved one’s estate is above that. If it is, or if you have a home to sell, then you will most likely need to initiate probate.
You can also just use Atticus which is WAY easier to start getting an idea of your total asset valuations along with state-specific advice. It just takes the guess-work out.
That’s sort of (and by sort of we mean exactly) why we built it.
Figure out what level of probate your estate needs
For people planning their estates
One way to help your family avoid probate is to create a living trust.
This type of trust is designed while someone is still alive, and it can hold assets on behalf of their beneficiaries. When that person, known as the trustor, dies, the assets in the trust will go directly to their beneficiaries without having to go through probate court.
Think of trusts like a special ownership folder people can tuck valuable assets into before they pass away, and then that folder is directly handed to the right person(s) instead of having to be “reviewed” by the court.
Another way to help avoid probate is to name a beneficiary on your accounts. For example, you can name a beneficiary on your retirement account, life insurance policy, or some bank accounts. When you die, the assets in these accounts will go directly to your beneficiaries without going through probate court. These are broadly known as transferable or payable upon death accounts (PODs or TODs). Ask your bank or provider if your account supports that.
You can also transfer ownership of your property to someone else or own your assets jointly. For example, if you own your home with someone else, the ownership will automatically transfer to the other person when you die.
Finally, you can give away your assets while you are still alive. For example, you could give each of your children a piece of jewelry or art that they cherish. If you give these items away while you are still alive, they will not be subject to probate when you die. Keep in mind some gifts have monetary ceilings that may trigger taxes if you exceed them, though.
Even if you can’t help your family avoid probate entirely, setting up ownership transfers in advance makes everything easier! Instead of leaving a messy web of ownership for your family, you can create a list of financial events that trigger the moment you pass, dramatically reducing the burden and time they have to spend thinking through this stuff.
Lower Levels and Alternatives to Probate
We like to think of probate in 3 levels:
Level 1 - Passing assets by affidavit (effectively skipping probate)
Level 2 - Summary or Small Estate Administration
Level 3 - Full or Formal Probate (either supervised or unsupervised)
If you can’t avoid probate, you want to try and get into level 2, which is called summary or small estate administration. This type of probate is available in some states and can be used when the estate is small or when all of the beneficiaries agree on how to distribute the assets.
Another alternative is called independent administration. This type of probate allows the executor more flexibility in managing the estate and can help to speed up the process.
Check your state’s requirements via the local probate codes (or use Atticus) for details on whether or not the estate you’re working on qualifies.
What To Do If You Have To Go Through Probate
First, gather all of the necessary paperwork. This includes things like the will, death certificate, and any other documents that the court may require. The sooner you have everything gathered, the sooner you can get started with the probate process.
The next step is to file a petition for probate with the court. This is where you officially start the probate process and let the court know that you are ready to begin. It is ideal to know which level you want to ask for at this point, because while you can always go into higher levels of probate, you can never go back down once you commit to one.
After you file the petition, notify all of the interested parties. This includes things like family members, creditors, and anyone else who may have a stake in the estate. It is important to give them all the necessary information so that they can be prepared for what is to come.
The last step is to follow the court's instructions and complete the probate process. Estate settlement can be long and complicated, but it is important to ensure that everything is done correctly — otherwise you can drag it out, or at worst, be liable for certain financial mistakes.
To be frank, this is the highest tip of the iceberg with probate. It’s not much.
But… we’ve written (in our humble opinion) the best guide on the internet about how to actually understand probate and your various responsibilities. Read that here.
Skip the headaches already
Look. We’re not going to say you’re doing the wrong thing by scouring the internet, slowly absorbing how estate settlement and probate works, agonizing over hiring a lawyer, and second-guessing every move you make… but what we will say is that we’ve been there, and we don’t recommend it.
In fact, we were so surprised at how patchwork education was in probate and estate settlement that we built a whole company with one goal in mind: to make probate and estate settlement simple. To feel like a breeze. And to not feel like walking uphill in the pouring rain with foggy glasses and steel-toe boots.
So if doing any of this sounds good to you:
- Getting specific and detailed steps in order and by jurisdiction
- Being able to download any form you need instantly
- Being able to file notice to creditors and freeze credit in a few short steps
- Creating your mandatory asset inventory all in one place
- Generating court-ready reports whenever you need
- And being able to pay for all of this from the estate instead of your own pocket…
And that should sound good to you if you get what probate is… then check Atticus out.