A will goes to probate to ensure the deceased's wishes and state law are both honored. With small estates, that may not be necessary.
When someone dies, a probate court often oversees the disposal of her estate. In some circumstances, however, the decedent's will or her estate can skip probate. Each state sets its own rules for the probate process.
Role of Probate
Closing an estate takes more than just distributing assets. An executor or administrator settles the decedent's remaining debts, pays his last tax bill, manages estate assets and eventually distributes the assets to heirs. A probate judge's work falls into several broad categories:
- Approving the executor named in the will.
- Determine the will is legally valid under state law.
- Appointing an executor if the deceased didn't name anyone.
- Monitoring the executor's handling of the estate.
- Authorizing the sale of estate assets.
- Settling disputes if the heirs disagree about how to interpret the will or how well the executor is doing her job.
- Approving the final distribution of the assets.
- Reviewing the executor's closing accounts. If they're acceptable, the probate court approves closing the estate.
Not every will or estate needs to go through this, however.
Size of Estate
Depending on state law, a will may only go to probate if the estate exceeds a specific size.
In Virginia, for example, if the estate is worth $50,000 or less and doesn't include real estate, probate may not be necessary. An heir can simply present a small estate act affidavit to the court, along with a death certificate for the deceased, to inherit. The American Institute of Certified Public Accountants says that in about half the states estates valued at less than $20,000 or $10,000 can skip probate. In some states the probate exemption extends to $100,000. The executor can subtract debts, taxes and funeral expenses from the estate to reduce the net value.
Some assets pass to heirs outside probate. Typically, the Nolo legal website says, the assets pass independently of the will as well. Even if the will says everything the deceased owned goes to her spouse, for instance, that doesn't apply to non-probate assets. For example:
- The money in jointly owned bank accounts normally goes to the co-owner, regardless of who deposited the cash.
- Real estate owned as joint tenancy goes to the co-owner.
- Retirement accounts such as an individual retirement account or 401(k) pass to the named beneficiary.
- Any asset with a pay-on-death or transfer-on-death beneficiary goes to that individual.
The Prince William County Virginia Clerk of Court says online that if all assets are non-probate — everything is jointly owned with a right of survivorship, say — the estate can skip probate.