When you die, you'll want to make sure your loved ones will be able to still pay their bills. Until your estate goes through probate, however, they may not be able to access your bank accounts, investments or other assets. The ownership of your home may also be in limbo.
Probate is the legal process for transferring property, including real estate, after someone passes away. The probate process can take a year or more, but there are ways to speed up the process and even avoid it altogether. To avoid probate and ensure your home goes to your family, you can make an estate plan, create a living trust or transfer assets before you die.
How Probate Works
The probate process varies depending on certain factors such as whether or not you have a will.
- How probate works with a will: If you die with a will, probate court will confirm that the will is legitimate. They'll also authorize the person named as executor to carry out their duties and will ensure all relevant taxes are collected.
- How probate works without a will: If you die without a will (known as dying intestate) or if probate court declares your will invalid, the court decides how to distribute your estate. The probate court chooses an administrator and directs that person on how to handle your assets, including money and real estate. If you're married or have children, the state typically distributes your assets to your spouse and children. If you don't have children or a spouse, the court will look for other living relatives. If they don't find any, the state will take ownership of your assets.
How Long Does Probate Take?
Probate typically lasts eight to 12 months, but may be quicker if there's a will or if your state offers an accelerated probate process. At the end of the process, your assets are distributed among your beneficiaries. Probate may take longer, however, if anyone contests the will. Estates that are big enough to owe federal or state estate taxes typically also take longer to probate. (For 2022, an estate must be valued at $12.06 million before federal estate taxes need to be filed.) A complicated estate—such as one involving a business or multiple pieces of real estate—may also take longer than average.
Although probate laws vary from state to state, many states' courts offer accelerated probate processes for estates under a certain value. The Uniform Probate Code (UPC), adopted in 18 states, allows for informal probate if no one contests a will. Under the UPC, the probate process is handled by filing documents without having to go to court.
Generally, only large or complex estates go through the formal probate process. In this process, the executor petitions the court; informs your beneficiaries, creditors and heirs of probate; and publishes a notice of probate in a media outlet chosen by the court.
Once the interested parties are notified, the court holds a hearing to either validate your will or hear any challenges to it. If your will is deemed valid, the executor gives the court a list of all your assets and their value, and a list of all your debts and creditors. Creditors typically have from three months to one year to file claims for what they're owed.
Even if the probate process is relatively short, a few months can seem like a long time for surviving loved ones who may need your assets to pay their bills. Whether going through an informal or formal probate, your estate's executor can speed the process by:
- Maintaining detailed records
- Responding to requests for information right away
- Filing documents and paying any taxes in a timely fashion
How to Avoid Probate
You can't always avoid probate, but there are some actions you can take to prevent it from affecting your home and other assets.
- Transfer ownership while you're still alive. Typically, spouses own their homes jointly. Joint ownership of real estate means your home passes to the surviving owner of the property when you die, with no need for probate. You could also grant joint ownership of your home to a chosen beneficiary, such as a child. Make sure the deed to your home is titled correctly to avoid any disputes.
- Put your home in a living trust. Also called a trust fund, a living trust is a legal entity into which you can transfer assets including real estate. Your living trust designates beneficiaries and specifies which assets they receive. When you die, the assets in the trust are transferred to your beneficiaries without going through probate.
- Designate a transfer-on-death beneficiary. Some states allow you to deed real estate to transfer to a specified beneficiary when you die, similar to a payable-on-death bank account. Also called a "beneficiary deed," this may have different names in different states.
It's best to consult an attorney before making any of these decisions to ensure they'll accomplish your goals for your home.
Protect Your Loved Ones
Probate can delay your family's ability to access your assets, including your home, after you die. This can make life even harder for your loved ones at an already difficult time. Without access to the resources you wanted them to have, they may have trouble paying their bills, potentially damaging their credit. Making an estate plan, writing a will, or setting up a living trust can all help shorten or eliminate the time your estate spends in probate, easing your family's worries.