How to Avoid Probate

As a follow up to my How to Write Your Will Guide, I wanted to continue to help the google lawyer in all of us by writing this “How to Avoid Probate” Guide. Despite the harrowing tales, in New York it is not always necessary to avoid probate. Although avoiding probate can certainly make things easier at times, it is not necessary. 

What is Probate?

Probate is the process by which your assets are transferred and distributed to your beneficiaries in accordance with your wishes as delineated in your Last Will and Testament (“Will”).  The probate process requires that your Will be filed with a Court and admitted to Probate.  Probate in most circumstances takes place in the Surrogate’s Court in the County in which the Decedent lived.  

Why Do I Want to Avoid Probate?

The probate process may at times be lengthy and costly.  People may want to avoid the length and the cost. With respect to the length of time it takes to probate a Will, much will depend on the specifics of your particular situation.  

For example, the Court requires that your closest relatives (known as “distributees”) be notified of the probating of your Will, regardless of whether you are leaving any of your assets to them.  These closest relatives, known as distributees, will need to either sign a Waiver agreeing that the nominated Executor be appointed and the Will be admitted to Probate or be served with a Citation giving them a chance to voice any contentions they may have with the Will.  If you have lost touch with these relatives and the Executor and beneficiaries do not know who they are, where they live or how to get in touch with them, there will be a delay in the probating of your Will.  Your Executor will need to try to locate these relatives.  If unsuccessful, after a diligent search, the Court will appoint a Guardian Ad Litem (GAL) to act in the shoes of those unknown distributees to protect their interests.  The GAL will then conduct an investigation, review the provisions of the Will and prepare a report for the Court.  This takes additional time and comes with additional costs. Going a step further, this also opens the door for these relatives to air their grievances with the provisions of the Will. You may not want to go through any of this and therefore may want to avoid probate at all costs. 

Another reason you may want to avoid probate is if you own real property, for example, a summer or vacation home, in multiple states.  In such an instance, you will need to engage in probate in multiple states. Indeed, your Executor will need to bring an ancillary probate proceeding in the other States, in addition to in New York, to gain authority for those assets. You may not want the headache of multiple probate proceeding and therefore may want to avoid probate. 

Additionally, the Probate process is a public process.  That means that all documents filed with the Court, including your Will, can be viewed by any other people.  There may be circumstances when you do not want all of your beneficiaries to know what each beneficiary is getting.  You may wish to leave more to one person than the other or alternatively, you may wish to exclude one of your relatives entirely.  In these situations, you may prefer that your estate plan remain private.  

You may also want to avoid probate if you or your spouse were a Medicaid recipient, in order to avoid estate recovery.  Currently in New York, Medicaid may only recover money for benefits paid out on your behalf from your probate estate.  Medicaid may not recover against your non probate assets.

Finally, your Executor does not gain immediate control of your assets nor will your beneficiaries receive their inheritance until all the aspects are sorted out.  If you want someone to have access to your assets immediately or you want your beneficiaries to have access to your assets right after your death, you may want to avoid probate.

  How Do I Avoid Probate?

Now that you know the many reasons to avoid probate, you are probably wondering how you can avoid the probate process.  There are several ways to avoid probate.  

One such way is to create and fund a trust during your lifetime.  The Trust document works similar to a Will, whereby you can designate a person to manage your estate (called a Trustee) and you can enumerate the specific provisions for distribution of your assets. Trust documents, under most circumstances will not need to be filed with the Court, thereby remaining private and do not bring with them many of the Court notice requirements that you have with probate, thereby avoiding additional delay and costs.  Upon your death, the Trustee will have control over your assets in a much more immediate way. Further, if all assets are placed into your trust, including assets from a different State, you will avoid the need for an ancillary probate.  And assets placed into a trust, will avoid estate recovery as well.  

You may accomplish a similar result with a joint account or by listing beneficiaries on your accounts through beneficiary designations or payable on death designations.  You will however, need to make sure you do this on all of your accounts with each financial institution. These assets will pass by operation of law upon your death, to your joint account holder or the beneficiary designated.  There are reasons to utilize a trust over the other options.  

Is Probate Unavoidable?

Probate is not always avoidable.  Even when you have prepared a Trust, maintained your accounts as joint, or designated beneficiaries on your accounts, there may be circumstances that arise in which you cannot avoid probate.  For example, you may have assets that you were unaware of that remained in your individual name, or you may not have funded your trust completely prior to your death, making probate necessary.  

Another instance would be if you maintain your accounts as joint or have designated beneficiaries on your accounts, but the joint account holder or beneficiary designated predeceases you.  In such a case, these assets will need to pass through Surrogate’s Court, despite your planning, either through probate if you have a Will or through administration, if you do not.  

In such circumstances, if your estate assets are less than $50,000, you may be able to file a small estate proceeding, which will streamline and speed up the process somewhat.

For more information, please contact NYC Probate Litigation, Guardianship, NYC Probate and Estate Planning attorney Regina Kiperman:

Phone: 917-261-4514
Fax: 929-556-2089
Email: rkiperman@rklawny.com

Or visit her at:
40 Wall Street
Suite 2508
New York, NY 10005
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