JO Knows Probate

Probate is the process by which a court oversees the lawful transfer of title to property under a will. It must take place in the state and county where the decedent resided when they died. Probate does not involve non-probate assets, such as life-insurance or retirement-account proceeds passing to designated beneficiaries; property owned by trusts on the date of death; or jointly owned property when the first joint owner dies. So married couples who have joint title to most of their property rarely need probate after the first spouse dies.

The word “probate” often engenders fear. But probate is not a scary process. The court is there to oversee the job your personal representative does and to make sure the instructions in your will are followed. Your lawful debts will (and must) be paid. Your heirs take comfort in knowing that the court will hear them if they have questions or objections. Probate is not unduly lengthy; usually six months or so is enough to wrap things up. And it is not a great expense. In fact, many people will spend more money trying to “avoid probate” than probate costs.

While placing an asset (like an investment account or a vacation home) in a trust will avoid probating that asset, it is almost impossible—and probably foolish—to try to make everything you own a non-probate asset. Under Indiana law this is unnecessary, because no probate estate need be opened if the value of the probate assets is less than $50,000. So you don’t need to put your refrigerator, lawn mower, golf clubs, or clothing into a trust.

Rather than probate avoidance, a better goal is probate management. Monitor the way your assets are owned. Create joint ownerships, designate beneficiaries, and use a trust in sensible ways. But don’t go overboard. For example, while making cash gifts to children and grandchildren can have many benefits, be sure that you keep enough resources available to provide for your own care and comfort.