April 28, 2022- The definition of probate is establishing the validity of a will, which is a court process. Often times when someone dies without a will, you may still hear someone say that probate is necessary. At this point, it would be more technically correct to say that the estate has to be administered, which also is a court process. When would this be necessary? The following is an example I often use.
John Smith has an account in his sole name at the Bank of Yoga. Mr. Smith is a widower and has one adult daughter, Jane Smith.
Scenario One– Mr. Smith passes away with a will naming Jane as his sole beneficiary. Jane takes his will to the Bank of Yoga, and they tell her they don’t know if the will is valid. In order to prove that it is valid, probate is necessary. Jane has to hire (pay) an attorney and begin probate before she’ll be able to collect the funds from the Bank of Yoga.
Scenario Two– Mr. Smith passes away without a will. The law says that Jane is his sole heir, and Jane conveys this to the Bank of Yoga, but the bank tells Jane they need an order from the court before they can release the funds; therefore, an estate administration is necessary. Jane has to hire (pay) an attorney and begin an administration before she’ll be able to collect the funds from the Bank of Yoga.
Scenario Three– Mr. Smith passes away, but named Jane as a beneficiary to his account, making it payable on death to Jane. Jane presents a death certificate to the Bank of Yoga and proves she is Jane Smith. An attorney was not needed, and Jane didn’t have to wait for a court process before she could collect the funds.
Which scenario did you prefer?
So why avoid probate or an estate administration? It saves money and time.
Please note this is a general example and situations can differ amongst jurisdictions and individual situations, so if you do have any questions or concerns, you should consult an attorney.