Probate is the court-supervised process of inventorying the assets and liabilities when someone dies and then satisfying creditors and distributing remaining assets to beneficiaries. The decedent’s will provides instructions for how this will be done; however, not all property is subject to disposition by will or the probate process.
For example, most life insurance policies and annuity contracts name a beneficiary and that beneficiary is paid directly by operation of law preventing those assets from passing through probate. The same holds true for many brokerage accounts, retirement accounts and many bank accounts that include a payable on death (POD) or transfer on death (TOD) provision. Many joint accounts will pass to the surviving owner directly without going through probate and assets titled in certain trust agreements will be administered and disposed of by the trustee pursuant to the provisions of the trust - also avoiding probate.
Real property may be titled in such a way that it passes to a joint owner directly without going through probate. There may be times when an estate does not have enough liquidity to satisfy creditors and certain real property or other non-probate assets must be brought back into the estate via court order to ensure that those liabilities are satisfied.
Assets that must go through probate are those that only have the decedent's name on the title. The majority of estates in probate court tend to be relatively straightforward; however, probate can be a lengthy process tying up the decedent's assets while incurring attorneys’ fees and court fees. For these reasons, many people take steps to minimize the property that will go through probate and work with an experienced estate planning attorney to make the process as smooth as possible. For more information on ways to protect your estate and avoid unnecessary assets going through probate, contact the experienced estate planning attorneys at Stouffer Legal in the Greater Baltimore area.