What is Probate?

What Is Probate, and Why Should You Avoid It?

If you've heard the term "probate" before but aren't quite sure what it entails, you're not alone. Many people don't think about probate until they’re dealing with the passing of a loved one. However, understanding probate and its potential downsides can help you take steps to protect your family and assets in the future.

What Is Probate?

Probate is the legal process that occurs after someone passes away. It is the court-supervised procedure of distributing a deceased person's assets, paying off debts, and ensuring that everything is handled according to the law. If the deceased had a will, the court will validate it and oversee the distribution of assets. If there was no will (known as dying intestate), state laws determine who inherits what.

At its core, probate serves an important purpose: ensuring that assets are distributed properly and that creditors have an opportunity to make claims. However, probate can also be a long, costly, and frustrating process for those left behind.

Why Should You Avoid Probate?

While probate serves a necessary function, most people would rather avoid it if possible. Here’s why:

1. It’s Time-Consuming

Probate can take months, sometimes even years, to complete. This delay can be particularly difficult for families who need immediate access to financial resources. The court process moves at its own pace, and every step—filing paperwork, waiting for hearings, and resolving disputes—takes time.

2. It’s Expensive

Legal fees, court costs, and executor fees can add up quickly. In Wisconsin, for example, attorney fees for probate cases can be significant, and other costs, such as appraisal fees and accounting expenses, only add to the financial burden. These costs ultimately reduce the value of the estate, leaving less for beneficiaries.

3. It Lacks Privacy

Probate is a public process, which means that anyone can access court records and see what assets were owned and who inherited them. This lack of privacy can lead to unwanted solicitations, family disputes, or even attempts by fraudsters to take advantage of beneficiaries.

4. It Can Lead to Family Conflict

Unfortunately, money and emotions don’t always mix well. Probate often increases the likelihood of disputes among heirs, especially if there’s disagreement over how assets should be distributed. Family conflicts can lead to costly legal battles and permanently damage relationships.

How to Avoid Probate

The good news is that with proper estate planning, you can minimize or completely avoid probate. Here are a few ways to do so:

1. Establish a Revocable Living Trust

A revocable living trust allows you to transfer assets into the trust during your lifetime. When you pass away, those assets are distributed according to the terms of the trust without needing to go through probate. This ensures a quicker, smoother, and more private transition of wealth.

2. Use Beneficiary Designations

Certain assets, such as life insurance policies, retirement accounts (401(k)s, IRAs), and even some bank accounts, allow you to name beneficiaries. These assets pass directly to the named individuals, bypassing probate altogether.

3. Hold Property Jointly

In Wisconsin, holding property as joint tenants with rights of survivorship means that when one owner dies, the property automatically transfers to the surviving owner(s) without going through probate.

4. Utilize Transfer-on-Death (TOD) or Payable-on-Death (POD) Designations

Many states, including Wisconsin, allow you to name beneficiaries for bank accounts, vehicles, and even real estate through TOD or POD designations. These tools ensure assets pass directly to beneficiaries without court involvement.

Take Action Now!

Avoiding probate isn’t just about making things easier for your loved ones—it’s about ensuring your wishes are carried out efficiently, affordably, and privately. The best way to protect your assets and your family is through proactive estate planning.

If you want to discuss how to avoid probate and create a customized plan for your estate, contact our office today. Taking the right steps now can save your family time, money, and unnecessary stress in the future. 

(715) 390-0346