Probate is simply a method of transferring your assets to your heirs upon your death. Probate involves filing papers in Court, and then submitting the management of the estate to the general supervision of the Court. Probate typically requires an attorney. There has been a great deal of misinformation demonizing the alleged evils of probate, portraying it as a thing to be avoided at all costs. In general, probate is not as bad as has been protrayed; most probates are finalized within six months of filing, usually heirs can receive at least some of the assets well prior to that time, and the attorney fees for an uncomplicated probate are very reasonable. That being said, there are some effective methods of avoiding probate, and a good estate planning attorney will help you decide whether any of these methods would be feasible for you.
For example, a "Community Property Agreement" between spouses will avoid probate upon the death of the first spouse. However, use of these Agreements should be limited to those couples with a stable, long-term marriage; who do not have children from prior marriage, and who do not have a tax sensitive estate (about $2,000,000.00 or more). If appropriate, the Community Property Agreement is typically prepared at the same time as your Wills are done. However, please be aware that Community Property Agreements are not a good idea in all circumstances. For example, if the marriage is not very stable and one of the spouses has a lot of separate property (acquired either before the marriage or by inheritance during the marriage), then a Community Property Agreement would be a very bad idea for the spouse who owns the majority of the property. If you end up in divorce court, you will find out why.
Another method of avoiding probate is by a "Revocable Living Trust". Again this is not appropriate for all situations; but, as discussed on the estate planning page of this website, it is very effective in some circumstances.
Finally, a method of avoiding probate for persons with simple estates (no real estate, a very few number of heirs) is by naming the heirs as beneficiaries on your financial accounts. This can create problems in some situations, though, and should not be done without having thoroughly discussed your circumstances with a competent estate planning attorney.
A very bad way of avoiding probate is by gifting your assets before your die to children (or other heirs).
Jon A. Clark has been practicing Probate and Estate Planning law for over 30 years. All clients receive very competitive rates, and members of the AARP receive a 20% discount on fees. Contact Jon Clark today for a free 30 minute consultation.