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Probate

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.