Probate is a legal procedure that is required in most states when a person who owned property passes away. Probate helps settle the assets and debts of the decedent's estate, ensures that heirs and beneficiaries receive assets designated for them in the will and transfers the legal ownership of property. Generally, if a dead person owned real estate when she was alive, that property must go through the probate process.
State Laws Differ
State laws on probate requirements can vary based on the state the decedent lived or owned property in. Generally all states require probate if the decedent owned his property individually, without a co-owner. Some states have a small estate process that the surviving family can use in lieu of a formal probate procedure, but the total value of the estate assets must fall below a minimum dollar amount to qualify. The small estate value amount varies from one state to another.
Probate property is real estate that was individually owned by the decedent. Regardless of whether the decedent did or did not have a will, all of her personal property is included in the probate estate as well. Personal property can include bank and investment accounts, land or stock holdings, collectibles or antiques, jewelry and any other items of value.
Most states enable you to own property or assets in a way that keeps them out of the probate process when you pass away. Jointly owned real estate that is set up with the right of survivorship, for example, automatically passes in ownership to the joint owner when you die. A joint bank account, an investment account that is "payable on death," or a life insurance policy with a named beneficiary are all examples of non-probate assets that automatically pass to the person you designate.
When you leave a formal, legal will behind after you die, you expect specific property and assets to be passed on to your designated heirs and beneficiaries. The probate process settles any outstanding, unpaid debts you left behind first, however, using any and all available probate assets from your estate. If you have more debts than assets, the probate court may order the assets sold so that the debts can be paid. Your heirs and beneficiaries only receive what is left to them in the will after all debts are settled.