Many think that when someone passes away, probate is automatically necessary. The truth is more complex. Some estates have to go through the probate procedure, but with appropriate planning, many may avoid it entirely. Figuring out which assets need to go through probate can help your family save time, money and stress during this difficult period.
When probate is necessary
When a person passes away and leaves behind property that is only in their name and has no beneficiary, probate is required. This typically includes a residence owned solely by the deceased, bank accounts in their name alone or personal property lacking a transfer provision.
The probate process is overseen by New Jersey’s Surrogate’s Court. This process includes certifying the will, settling debts and allocating assets to beneficiaries. Since probate is a court proceeding, it becomes part of the public record. This means anyone can access the information about the estate. The process can take months to finish, depending on how complex the estate is.
Assets that skip probate
Without going through the courts, some types of assets go directly to the recipients. A revocable living trust designates who gets the property when the trust is set up. If two people own property together and one of them dies, the property immediately passes to the surviving owner.
Accounts with named beneficiaries also do not have to go through probate. This encompasses bank accounts with payable-on-death designations, life insurance policies and retirement funds like 401(k)s and IRAs. Investment accounts that let you transfer money upon your death work the same way.
Options for small estates
Things are easier for smaller estates in New Jersey. Estates totaling under $50,000 with a surviving spouse, or under $20,000 for other family members without a surviving spouse, can bypass formal probate through an affidavit process. This simplified method saves both time and legal expenses.
Planning makes the difference
With strategic estate planning, you can structure your assets so that probate is less likely to happen or does not happen at all. This method works well for estates of all sizes. You need to act now, while you still have choices, rather than letting chance or state law make these choices for you.