Probate is expensive and can be a long process, and having a last will and testament is not necessarily sufficient to avoid it. So, when is probate required? And when is probate NOT required?
The answer depends upon – among other things – the type and value of assets in the estate, and the jurisdiction. Regardless, probate will probably be required, and possibly even beneficial, under the following circumstances:
· Of course, if the deceased didn’t have a last will and testament probate is the only way to distribute the assets and transfer the title.
· If real property, such as real estate, is owned solely by the deceased.
· Where the estate includes shares of a public company, then probate is required.
· Depending on the value of accounts held at a bank, trust company, or other financial institution, that institution may require probate to confirm that the Executor has been approved to receive the assets.
o Note however that the “rules” in this area are not legislated, and requirements vary from bank to bank. Even if an institution doesn’t request probate, they still may a request a personal indemnification from the executor should a problem with the will arise.
· Probate is required if the will is contested, or deemed invalid due to the following situations:
o The deceased was not psychologically capable when he or she made the will so some or all of the decisions in it may be questioned. (“Mental Incompetence”).
o The deceased was under stress or duress when he or she made the will. (“Undue Influence”).
o The will was not written clearly or there is doubt about what a certain provision is intended to mean (“Improper Execution”). For example, where a will does not have a provision naming a successor heir where the originally-named heir has already passed away.
· If there were other owners or designates of any of the estate’s property or assets, then in most cases probate is required to transfer title to the beneficiary.
· When the Executor needs to sue someone who owes money to the estate, or if the estate owes money to creditors, then probate will be required.
When is Probate NOT Required
Of course, it obviously makes more sense to see if you can avoid probate altogether. When is probate not required? The main times this will be the case is where the deceased had very little assets, or where assets are held jointly with another person.