Probate refers to the legal process of settling an individual’s estate and distributing his or her property and assets to heirs and other named beneficiaries after he or she passes away.
If a person dies with a will, the court will generally follow the directions the decedent’s outlined for distributing assets and naming guardians for minor children. When a will does not exist, the state where the deceased individual lived will follow its intestate laws to determine how the decedent’s assets will be distributed.
While it is important to have a will and make your wishes known, you must also understand and prepare for the challenges and issues that can arise during the probate process.
Assets that are Not Subject to Probate
Property and assets that you own during life and have named a beneficiary to receive at your death, including those titled as “joint ownership with rights of survivorship”, will typically avoid probate. For example, bank and brokerage accounts, 401(k) and IRA retirement accounts, life insurance policies, and certain trusts require owners to name beneficiaries to automatically receive these assets upon the owner’s death. However, if the beneficiaries named on these assets are different from those identified in your will, the named beneficiaries will receive the property, rather than the individuals named in your will.
As a result, it is critical that you regularly review your will and keep it up-to-date, ensuring that named beneficiaries are consistent across all types of assets and legal documentation.
Disadvantages of Probate
How to Avoid Probate
With proper planning, it is possible for you to avoid the public, time-consuming and costly process of probate. A financial planner can help you to understand the various strategies and tools available to ensure your assets are passed directly to your heirs, as you intend, and in a timely manner. This can include proper titling of assets, naming beneficiaries on insurance policies and retirement accounts and making use of trusts to hold and distribute assets outside of probate.
About the Author: Lee F. Hediger is a co-founding director with Provenance Wealth Advisors (PWA), an Independent Registered Investment Advisor affiliated with Berkowitz Pollack Brant Advisors + CPAs, and a registered representative with Raymond James Financial Services. For more information, call (954) 712-8888 or email info@provwealth.com.
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Lee F. Hediger is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC.
Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors + CPAs. PWA is not a registered broker/deal and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of the advisors of PWA and not necessarily those of Raymond James. You should discuss any legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
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Updated August 7, 2023