After a person dies, his estate may need to go through probate before heirs can receive their inheritances. Probate is the process by which the court examines an estate and determines what to do with its assets. In some cases, an estate does not need to go through probate thanks to inheritance rules regarding certain types of accounts.
If the deceased person was married at the time of his death and all of his spouse jointly owned the property, his estate does not need to go through probate, according to attorney Bill Peterson. Instead, the jointly held property transfers to the surviving spouse's name and she is free to do with it as she wishes. The surviving spouse only needs to inform her creditors of her spouse's death.
If all of the deceased person's assets are accounts with designated beneficiaries, such as 401k accounts, life insurance policies or pension funds, the estate does not need to go through probate. These types of accounts are exempt from probate; the beneficiary receives the account as soon as the plan provider learns about the account holder's death and processes the transfer of the funds. If the deceased has other funds in addition to these accounts, the estate still must go through probate before distributing those assets.
Affidavit of Collection
If the state allows it, the deceased may prepare an affidavit of collection for small estates prior to his death. For example, in Minnesota a will writer may use an affidavit of collection if his assets are less than $50,000 and he does not have any real estate. An attorney prepares this document for the will writer; the affidavit of collection stipulates the estate's assets and liabilities so that the probate court does not have to examine them.
If you want your heirs to avoid having to wait for your estate to go through probate after your death, consult your attorney to determine the appropriate options. Your attorney can help you file affidavits or other paperwork to help lessen or eliminate the need for probate, as well as setting up trust funds or other accounts that will automatically transfer to named beneficiaries after your death.
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