Disclaimer: Consumer legal fundings and advances are not loans under applicable financing laws. Rockpoint’s products are non-recourse, meaning if you don’t win your case, you don’t have to pay us back. Receiving financial support in connection with a legal case is typically (and oftentimes incorrectly) referred to as a “lawsuit loan” or “loan.” Therefore, for the ease of search references, these terms may be used in this context to refer to our funding products, but we maintain our separateness from consumer loan products in all legal aspects.
If your loved one recently passed away, you may dread the thought of navigating probate during this challenging time. The good news is that probate is not always necessary. If your loved one structured their estate plan to avoid probate, you may be able to bypass this process altogether. Alternatively, certain assets may not need to go through probate, streamlining the process.
So, when is probate not necessary? Learn a few common instances and how to determine whether you need to go through probate for your loved one’s assets. (Keep in mind that probate laws vary by state; consult Maryland probate law or the statutes in your loved one’s state for more specific guidance.)
Instances When Probate Is Not Necessary
Probate is the legal process of distributing your loved one’s assets, settling their debts, and fulfilling their instructions in the will. If you have never navigated probate before, you may wonder why the court needs to be involved in this private process.
Probate ensures that your loved one’s will comes to fruition and their assets go to their rightful heirs. It prevents an unwanted party from taking control of their assets or otherwise disobeying their wishes.
Many estates must undergo probate before beneficiaries can receive their inheritance. However, there are a few instances when probate is not necessary.
Your Loved One Owned Property Jointly
The assets that your loved one owned jointly with their spouse or another person may not need to go through probate. Upon their death, these assets likely transferred to the surviving co-owner automatically.
Examples of property your loved one may have had joint ownership of include:
- Real estate (family home, business properties)
- Vehicles (automobiles, boats)
- Bank accounts
- Stocks
You’ll need to look at the deed for physical property to determine its ownership. You may also encounter transfer-on-death (TOD) deeds, which pass the asset to a new owner upon the current owner’s death.
Just because your loved one shared an asset with a spouse or another family member does not mean they legally owned it jointly with that person. If they did not, it may still need to go through probate.
Your Loved One Gave Beneficiary Designations on Their Accounts
Many of your loved one’s accounts may have allowed them to assign beneficiaries. These are people who would automatically receive ownership of the account upon your loved one’s death.
Verify whether your loved one had beneficiary designations on any of the following accounts:
- Bank accounts
- Retirement accounts
- Life insurance policies
If any of these are payable-on-death (POD) accounts, they can likely bypass probate and go directly to the beneficiary. To initiate the transfer, you may need to provide the financial institution with a copy of the death certificate.
Your Loved One Had a “Small Estate”
Some states allow small estates to bypass probate. For example, according to Maryland’s estate information guide, a small estate is valued at $50,000 or less. These estates may qualify for a small estate affidavit that bypasses probate.
In many states, very small estates valued at less than $5,000 may automatically be eligible for exemptions from the full probate process. They can qualify for a summary release from administration or a simplified probate process that typically takes less time to finalize.
Talk to the probate court about whether your loved one’s estate may meet any threshold requirements for small estates. You will likely need to apply for an affidavit that allows you to collect personal property directly rather than going through the court process.
Your Loved One Had a Living Trust
If your loved one planned ahead before their death, they may have transferred their assets into a living trust instead of simply listing them in a will. Living trusts typically do not have to go through probate. Instead, the assets in the trust transfer to the beneficiary after the grantor’s death.
Living trusts have trustee designations. The trustee is responsible for acting as custodian of the assets held in the trust. They will need to review the terms of the trust and transfer the assets according to the decedent’s wishes. For example, some trusts specify that assets should only transfer once a beneficiary turns 18 or reaches another milestone.
How To Determine Whether Probate Is Necessary for Your Loved One
Understanding whether your loved one had non-probate assets or met other circumstances to bypass probate may feel challenging. You can seek answers to “When is probate not necessary?” in a few different ways:
- Contact the probate court: Call the probate court in the town where your loved one was residing when they passed away. Ask them for guidance about instances where probate may not be necessary. You may need to fill out the probate application with information on your loved one’s assets before the court can advise you.
- Speak with an attorney: A probate attorney can provide more tailored guidance about bypassing the probate process. They can review your loved one’s will and assets and guide you through your next steps.
Need Financial Relief During Probate? Turn to Rockpoint Probate Funding
“When is probate not necessary?” is just one of the many questions you are likely to ask during the confusing time after your loved one’s death. You’ll also face a wide range of expenses as you sort through probate documents and prepare to close their estate.
If you’re facing financial hardships, consider applying for an inheritance advance from Rockpoint Probate Funding. Contact us today at 888-263-8588 for a free evaluation.
