What Is Probate?

Probate is the court-supervised process of authenticating a last will and testament or identifying a deceased person's (decedent’s) heirs when there is no will and properly distributing the decedent's estate. During probate, the decedent’s assets are identified and gathered, his or her debts are paid, and the assets are distributed to the appropriate beneficiaries or heirs.

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In general, the decedent’s assets are used to pay the following obligations, in order of priority:

1. The cost of the probate proceeding, including attorney’s fees;

2. The decedent’s funeral expenses;

3. The decedent’s outstanding debts.

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The remainder of the decedent’s assets are then distributed to the decedent’s beneficiaries or heirs.

Do I Need a Probate Administration?

You need a probate administration if the decedent had probate assets. Probate assets are generally any assets that were owned solely by the decedent, or that were owned by the decedent and one or more co-owners and lacked a provision for automatic succession of ownership at death. Probate is necessary to formally pass ownership of the decedent’s probate assets to the decedent’s beneficiaries and to complete the decedent’s financial affairs after his or her death. Administration of the decedent’s estate also protects the estate’s assets by ensuring that the decedent’s creditors are not entitled to payment unless they correctly follow certain procedures.

Examples of probate assets include, but are not limited to, the following:

• A bank account or investment account that is solely in the decedent’s name;

• Real property that is titled solely in the decedent's name or held as a tenant in common (including homestead property, although homestead property is generally exempt from creditors' claims);

• Personal property, such as jewelry, artwork, automobiles, and boats;

• An interest in a partnership, corporation, or limited liability company;

• Any life insurance policy, annuity contract, or individual retirement account that lists either the decedent or the estate as the beneficiary; and

• Non-probate assets that list a deceased person as the beneficiary.

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Examples of non-probate assets include, but are not limited to, the following:

• Property held in a revocable trust;

• Property that is held in joint tenancy or as tenants by the entirety;

• Bank or brokerage accounts held in joint tenancy or with payable on death (POD) or transfer on death (TOD) beneficiaries; and

• Any life insurance policy, annuity contract, or individual retirement account that lists beneficiaries other than the decedent or the estate as the beneficiary.

Does the Money in a Bank Account Have to Pass Through Probate?

One of the most common assets a loved one leaves behind is a bank account- sometimes multiple bank accounts. A bank account does not have to pass through probate when the account holder listed a pay-on-death “POD” beneficiary (and the POD beneficiary is still living) or if the account is held jointly with another living account holder.

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Pay-on-Death (“POD”) Beneficiaries

Bank account holders have the option to list POD beneficiaries on their individual checking and savings accounts at each bank they hold accounts with. The function of the POD beneficiary is just as it sounds- the account holder identifies and designates the beneficiary/beneficiaries he or she wishes the bank to distribute the bank account funds to after the account holder’s death.

After the account holder’s death, the named POD beneficiary should contact each bank to determine what the bank’s POD beneficiary policies and procedures are. Most banks require the POD beneficiary to produce a certified copy of the account holder’s death certificate and a form of personal identification before the bank will distribute the account holder’s money.

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A POD beneficiary on a bank account allows loved ones to have access to the money in a bank account without the expense and delay of a probate proceeding.

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Joint Bank Accounts

A bank account held jointly between two account holders passes by operation of law to the surviving account holder. For example, assume a husband and wife held a joint checking account. When the husband dies, the wife will become the sole owner of the money in the bank account. None of the money in the bank account will become part of the husband’s probate estate. The bank account money does not have to pass through probate.