Probate court was created for verifying your last will and testament and ensuring your assets are distributed properly or deciding how to distribute assets in the absence of a will. Imagine if your estate was tied up for months in probate, subjecting your heirs to added stress and heartache.
But there are some issues that will all but guarantee that will happen. In fact, there are two main scenarios that if you have them, your estate would likely end up in probate court.
Scenario #1 – Is your estate worth more than $75,000 outside of your homestead?
If it is and the assets include real estate other than your homestead then you’re looking at your property sitting in probate court until a judge can issue an order about what to do with it. Real estate isn’t something that can be easily divided up amongst your heirs if they all have different needs or ideas about what “should” be done with the property.
Scenario #2 – Do you have children under the age of eighteen?
If the answer is yes, you might think a will is enough. That still won’t include where your life insurance money will go after your death. If you haven’t mapped that out, it will typically go into a custodial account managed by the state or an appointed Guardian until they are 18. What if you’ve named the guardian directly and they die while still managing that money for your children, it could be tied up in their probate process. This would be a disaster for your children because they would basically have to prove the money was theirs.
How to avoid these
Wouldn’t you rather have a greater say over your estate? You could donate to friends or charity or any number of things. But regardless, by setting strict guidelines on when and how your money is used, you can always do one level better than the probate code. Of course many of the issues that arise because of, or during probate can be eliminated or resolved by putting your assets into a revocable living trust prior to your passing.
