Probate LawsWhat is Probate?

Probate is a court proceeding to clear title to property passing from the decedent (person who is deceased) to the persons named in the decedent’s will or those entitled to property if the deceased dies “intestate” or without a will.  Probate ends with a “decree” or order of distribution that will serve as the recipients evidence of title to the property inherited.  

In order to determine which assets are subject to probate you must determine what kind of ownership interest the decedent had in each asset.  If the decedent was the sole owner of an asset and title is completely in his or her name, then this asset is usually subject to probate.  But, when the title is shared with another then there are certain questions that must be asked in order to determine its proper distribution.   

Assets not subject to probate:
Assets that by law, are pre-arranged to go to someone upon death of the owner, causing no shift or change in title, are not subject to probate.  For example, assets held in joint tenancy with right of survivorship, assets in a bank account trust, funded living trusts, and assets set by contract such as life insurance proceeds that name a beneficiary upon death of an individual, are not subject to probate.  

An asset owned by two or more persons as tenants in common is subject to probate only as to the dying party’s share.  The interests of the survivors will continue to belong to them and are not part of the decedent’s probate estate.  If an asset is owned by a husband and wife as community property, the surviving spouse’s one-half may or may not be subject to probate depending on the law of the state.  In California, the one half interest of the surviving spouse is not subject to probate.  In California, the decedent’s assets are not subject to probate if they pass to a surviving spouse under a will or by the laws of intestacy.  Yet, even when the law does not require that the decedent’s assets be probated because they go directly to the surviving spouse, it may still be necessary to have a court determination that the assets do, in fact, pass to the surviving spouse.  A title company or a stock transfer agent may also require this procedure to make sure that a correct transfer is made to the proper party.  

Probate Procedure
There are several, detailed steps in probate, but generally three steps are carried out
(1) collecting and inventorying all assets subject to probate administration;
(2) insuring that creditors and taxes are paid; and
(3) correctly transferring and distributing the estate to the persons designated under the decedent’s will or by intestate (where there is no will) succession.  

Advantages and Disadvantages of Probate
The major function and advantage of probate is that it protects the beneficiaries of the decedent’s estate.  The probate court ensures that the estate will be properly transferred to those entitled to receive it.  However, other means of distributing assets such as holding property in joint tenancy or naming a beneficiary to a life insurance policy do not necessary risk that the estate will not be properly transferred since the distributors of such assets will usually make sure that these assets are properly distributed.  Nevertheless, where assets are held or distributed to those that are less experienced in their management, the probate court serves an important role in the protection and proper distribution of such assets.