What is "probate"? It’s a question that clients ask all the time.
The word “probate” is used quite frequently and in different contexts. There is a “probate” court in every county in Ohio. You may have to “probate” someone’s Will after he/she dies. What about the need to “probate” someone’s assets as well? Should you avoid “probate” at all costs?
Those are good questions, but it may help to understand that the word “probate” can be used as either a noun or verb.
As a noun, “probate” often means “the official proving of a will as authentic or valid in a probate court.”1 When used as a verb, “probate” can mean “to establish the authenticity or validity of (a will).”2
When I discuss this topic with clients, however, they are usually not thinking of authenticating a Will at probate court. Clients are more interested in the entire “probate” process. Establishing the validity of a Will is usually just the first step in the process of administering a “probate estate.”
The next logical question is: What is a “probate estate”? The Cuyahoga County Probate Court states that “[a] probate estate is a legal proceeding provided for by Ohio law to determine the assets of a deceased person who was an Ohio resident at the time of death, the value of those assets, and the distribution of those assets to the persons entitled to them by law.”3
In other words, the probate court supervises the transfer of those assets which were held in the decedent’s name at the time of his/her death. The probate court is not involved, however, in the transfer of the decedent’s assets which were jointly owned with rights of survivorship, or those assets which had beneficiaries named. Those types of assets typically pass outside of “probate,” i.e., directly to the surviving joint owner or beneficiary.
Whether an asset is a “probate” asset or a “non-probate” asset is very important in estate administration. When a loved one passes away, I ask the family members to compile a list of all assets the decedent owned at the time of his/her death. Then we determine which assets must be listed on the inventory at probate court and which assets will pass directly to a surviving joint owner or beneficiary.
If the decedent had a Living Trust, then trust administration is also part of the overall estate administration. Living Trusts typically become irrevocable at the time of the trustor’s death, and then the Successor Trustee takes over the trust administration.
Trusts are one way to avoid “probate,” but only if the Trusts are properly funded before death. A Trust does not avoid “probate,” however, if the decedent did not transfer his/her assets into the Trust prior to his/her death, or the decedent failed to designate the Trust as beneficiary of other assets.
“Probate” often has a negative stigma attached to it, as if it’s to be avoided at all costs. That may or may not be true, depending upon each client’s specific needs and goals. That’s the subject for a future blog.