The word probate means “to prove.” Probate is
where certain matters pertaining to a deceased person’s estate are
“proved” in a judicial proceeding.
The basic goal is to pass clear title to assets on to the rightful
beneficiaries. Assets that are subject to the process are known as
probate assets. Nonprobate assets pass outside of probate and can
generally be described as assets that pass as a result of
beneficiary designation, by trust or by titling. Examples of
Nonprobate assets are IRA and life insurance beneficiary
designations, a trust that names a beneficiary or an account that is
set up with a “joint tenancy with right of survivorship” provision.
All other assets are probate assets. These assets pass either
subject to a Last Will and Testament or without a Will. Dying with a
Will is called “ testate.” Dying without a Will is called “
intestate.”
If a person dies testate, i.e. with a Will, then typically, the Will
names a Personal Representative to identify and collect the assets,
pay the deceased’s debts and expenses, and distribute the remaining
assets to the named beneficiaries. It can create trusts for minors
and other beneficiaries who need protection.
If there is not a Will, “intestate”, then the estate is still
administered in court and the law determines who will be the
beneficiaries who are called heirs. Heirs are the spouse (if one)
and children. If there are no children or grandchildren, then it
would be other close relatives. Passage of assets in accordance with
these laws may or may not be the way a deceased may have wanted the
assets to pass.
Probate in Oklahoma does require paper work, but where all the
beneficiaries agree on what should happen, it is a relatively simple
process and has many advantages.
Avoiding Probate
Many people want to avoid probate. Typically this is due to
misconceived ideas regarding the probate process.
Probate can be avoided if ALL assets are in a Trust, are titled with
joint tenancy with right of survivorship or have beneficiary
designations.
Some problems with joint tenancy or designated beneficiaries are
people may not die in the expected order of death, there is no
protection for minors or beneficiaries not capable of managing
property, and for real estate stocks, bonds and some other assets,
you lose control of the asset. If the joint tenant has creditor
problems, files bankruptcy, gets a divorce, or gets sued over a car
accident, then the joint tenancy assets may be at risk.
An example of another problem we see: Mom puts all four of her
children on her bank accounts, Certificates of Deposit, etc. One
child dies before Mom. That child’s survivorship rights terminate,
and when Mom dies, the surviving children get everything. The
children of the deceased child (Mom’s grandchildren) have been
disinherited.
Trusts can be beneficial but not always necessary. For most people,
anything that can be accomplished by a Trust can be accomplished by
a Will. Unless your estate is in excess of a million dollars, there
are no inheritance tax savings to be gained by a Trust.
We do recommend Trusts when any one or more of the following exist:
your expected beneficiaries do not get along with one another, you
believe there will be an estate contest after your death, you are
starting to have problems relating to dementia or Alzheimer's, or
you are not physically able to handle your affairs.
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