Education for Justice FACT SHEET S-1 Fall 2009
QUESTIONS ABOUT PROBATE
WHAT IS PROBATE?
After you die, your “estate”
needs to be taken care of. This is
called probate. Your estate is the
property you own and the debts you owe. Your
“personal representative” makes a list of all of your property and debts. The personal representative pays your debts,
and everything left over would go to your heirs. If you have a will, it should say how you
want your property to be given out. If
you do not have a will, state law has rules about who gets your property. The law gives your property to your
family. Even without a will, your
property will go to family unless you have no living next of kin. In that situation it would “go to the state.” Probate Court is used when there is a dispute
about your will or a judge’s order is needed to distribute your property.
WHAT DOES IT MEAN TO “AVOID
PROBATE”?
To “avoid probate” means your
property goes to your heirs after you die without going through probate
court. For instance, if you have a joint
bank account with another person, when you die, that person automatically owns
the account. No court order is needed
and probate court has been avoided.
Trusts, owning a home or land in joint tenancy, joint accounts, gifts
before death, and life insurance are all ways to avoid probate.
It is not always wise to
avoid probate. Probate is not costly or
lengthy unless your estate is big and complex or your heirs fight over your
estate. Sometimes avoiding probate costs
more than probate. This is especially
true if you are thinking about setting up a “living trust.” For more information on this, see our fact
sheet, Living Trusts.
A good will helps avoid
disputes over your property and probate court.
CAN I AVOID PROBATE BY HAVING A
WILL?
Having a will does not always
avoid probate court. It depends on what
property you own, whether you own it alone or with others, and who you want to
get it. For example, if real estate is
in your name alone when you die, then probate normally is needed. This is true even if you have a will. If family members disagree with the will or
how the estate is handled, they can contest the will and the probate court must
decide who should get the property. When
there is no will and, if family members contest the handling of the estate,
probate is also needed.
WHAT IF MY ESTATE IS SMALL?
If your estate is worth less
than $50,000, your heirs can collect your personal property without going to
court by using an “Affidavit for Collection of Personal Property.” Personal property includes bank accounts,
debts, stocks, and furniture and personal items, but not your home or real estate. Your personal representative would tell your
heirs what property they are allowed to have, where the property is and gives
them a copy of the Affidavit. The heir
must present the Affidavit, along with a certified copy of the death
certificate. This can be done 30 days after
the date of death.
SHOULD I ADD MY CHILDREN’S NAMES TO
MY DEEDS OR ACCOUNTS?
Think carefully about it
first! Doing this can cause problems
while you are still living. Probate is
not as bad as people think. They also
think it costs more than it really does.
If you put someone’s name on your deed or bank account, that person becomes
part owner of it. If you decide you want
to sell the whole property or get a mortgage, the other person has to
agree. If they do not agree you might
not be able to sell it. They could also
try to sell their part of the property to someone else and you would not be able
to stop them.
If you put someone’s name on
your bank account, that person has the same right to that money as you do, and
may try to take it. Also, if the amount
is large, you may have to pay gift tax.
Talk to a lawyer before you put another person’s name on any of your
property.
CAN TRYING TO AVOID PROBATE AFFECT
MY ELIGIBILITY FOR MA?
Someday you may need Medical
Assistance (MA) to help with high medical bills or nursing home costs. MA has limits on how much income and assets
people can have. MA also has a rule
against giving property away in order to get MA. When you apply, you must tell MA about any
property you gave away, put in a trust or sold for less than full value in the
last 5 years. Putting someone’s name on
a deed or bank account is a transfer
of property. You would have to show that
the transfer was done for some reason other than to get MA. Avoiding probate is not an acceptable
reason. Talk to a lawyer who knows about
property transfers and MA before you transfer any property.
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