PROBATE AND HOW TO AVOID PROBATE
A large part of my practice involves estates and probate.
What is the Court Probate Process?
Probate usually refers to having the estate of a deceased person go through the court. The court is known as probate court. The probate process involves filing court documents with the county court where the person passed away or where they own property. If there is a Will the Will will also be filed with the court. The formal probate process is very structured and there are a number of requirements that must be met. The probate process usually lasts at least 5 months as there is a minimum time period of 4 months in Oregon that a probate case must remain open for creditors to file claims.
In Oregon if your estate is below $275,000 in value there is an alternative process known as the Small Estate process. This procedure allows for filing of an Affidavit with the court along with the Will is there is one and the death certificate. The Affidavit sets forth the name of the heirs and a list of the assets subject to the court’s jurisdiction. This procedure is much cheaper than a formal probate process but is only available for estates that are less than the value of the Small Estate limit. The Small Estate limit changes from year to year so please check for an updated value.
WHAT WE DO.
We will help you with all of the legal aspects of post death adminstration, including court filings, publishing notice in the newspaper, sending the required notices to heirs and devisees, sending notice to the State, court required accountings and preparing the paperwork to close the estate with the court.
If you have been named as a personal representative, give me a call. I can explain what your obligations are and help you with the process. Even if you live in another town, county, state or country, I can assist you if it involves an Oregon estate. Much if not all of the legal work can be done by phone, mail, email or other correspondence so you don't have to travel.
What is probate?
Probate generally refers to administering the estate of a deceased person through the formal court system after death. Probate is the name of the court that handles the affairs of the estate of deceased persons and/or the affairs of a person that is mentally incompetent. The term probate then means proceeding through court after a person has died or in the event that a person is mentally incompetent and can no longer handle their own affairs. Thus when we say avoiding probate, we mean we have taken steps so that it will not be necessary to go through the full court process.
Why is it good to avoid probate?
The two main reasons that it is beneficial to avoid probate are time and cost. The probate process will vary from state to state. In many states there is a minimum of a 4 month period that the probate case must be open in order for creditors to file claims. In addition there is usually a month on either end of the 4 month period at least for filing of court paperwork. So, it generally will take at least 6 months to get through a probate case.
Expense is the other main reason to try to avoid probate. Probate can be a very expensive process. Some of the expenses include the court filing fee, newspaper publication fees, and of course attorney fees. The amount of expense will vary from state to state but generally run several thousand dollars at a minimum. In some states the fees may include a percentage of the overall probate estate. Therefore, if probate can be avoided the heirs of the estate may save many thousands of dollars in attorney fees and costs of the administration of the probate.
What about a smaller estate?
In many states, there are procedures to file what is known as a "small estate". A small estate procedure generally involves filing a less burdensome court document which usually is in the form of an Affidavit that is signed by the named personal representative in a Will or by one of the heirs in an estate. The amount that can be processed through a small estate will vary from state to state. In Oregon for example, an estate will qualify as a small estate is the real property has a value of $200,000 or less, and non-real property assets have a value of $75,000 or less. Thus, an estate with $275,000 or less in value that meets the above qualifications can be filed as a small estate proceeding. This type of proceeding is generally much less expensive than a full probate and is much quicker.
What are some ways to avoid probate?
The following are some methods to avoid probate.
1. Joint Ownership with Right of Surviorship (JTWROS)
2. Transfer on Death Designation (TOD).
3. Beneficiary Designation for Life Insurance or Retirement Accounts.
4. Revocable Living Trusts.
5. Irrevocable Trusts.
6. Small Estate Proceedings.
7. Community Property With Survivorship.
8. Gift While Still Alive.
9. Be Broke and Own Nothing.
1. Joint Tenancy With Right of Survivorship (JTWROS). Joint tenancy with right of survivorship involves 2 or more people owning an asset together as joint tenants. The term with survivorship means that when one of the people passes away, the survivor will own the asset automatically. This avoids probate because the title to the asset transfer to the other joint owner upon the death of the deceased owner. This is usually accomplished by providing a copy of a death certificate. Joint tenancy is most common for financial accounts such as brokerage accounts for stocks and mutual funds, and for motor vehicles. In some states it is also possible to have joint tenancy in real estate. This will depend on the state in which the asset exists.
The primary advantage of joint tenancy is that the asset is always available immediately after the death of the joint owner. The surviving joint owner can immediately access the asset and transferring ownership to remove the deceased persons name is a matter of filing the death certificate with the financial institution or recording the death certificate with the County for real estate, or filing with Motor Vehicles Division for a motor vehicle.
There is a major disadvantage with joint tenancy in that all joint tenancy owners are equal owners in the asset. This means that any of the joint owners could withdraw all of the money from a bank account. In addition, if one of the joint owners is sued or is divorced the joint asset could be part of the lawsuit or divorce case. In addition, if one of the joint owners decides to sell it will require consent of the other joint owners and their signature.
This can be a distinct advantage. I have sometimes seen cases where a parent adds a child’s name to an asset as a joint owner and then later the parent wishes to sell the house for example and can not do so without have the child sign off on the transaction.
I hope that this article has been helpful to you. If you have any further questions or need assistance in planning to avoid probate, please contact me at firstname.lastname@example.org or 503-838-0251.
THIS ARTICLE IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE PROVIDING LEGAL ADVICE. NOTHING HEREIN SHALL CREATE AN ATTORNEY-CLIENT PRIVILEGE BETWEEN JOHN HASBROOK AND THE PARTY READING THE ARTICLE. THE LEGAL ISSUES DISCUSSED IN THIS ARTICLE MAY OR MAY NOT APPLY IN ANY GIVEN STATE AND THE READER IS EXPECTED TO CONTACT THEIR OWN INDEPENDENT ATTORNEY TO DISCUSS THEIR INDIVIDUAL LEGAL QUESTIONS AND SITUATION.