In most instances, a will is required to go through probate to prove its validity.
Investopedia’s recent article entitled “When the Beneficiaries of a Will Are Notified” explains that there are exceptions to the requirement for probate, if the assets of the deceased are below a set dollar amount. This dollar amount depends on state law.
For example, in Alabama, the threshold is $3,000, and in California, the cut-off is an estate with assets valued at less than $150,000. If the assets are valued below those limits, the family can divide any property as they want with court approval.
The beneficiaries of a will must be notified after the will is filed in the probate court, and in addition, probated wills are placed in the public record. As a result, anyone who wants to look, can find out the details. When the will is proved to be valid, anyone can look at the will at the courthouse where it was filed, including anyone who expects to be a beneficiary.
However, if beneficiary designations or transfer on death designations are structured to avoid probate, there are no specific notification requirements. This is pretty uncommon.
As a reminder, probate is a legal process that establishes the validity of a will. After examining the will, the personal representative collects the decedent’s assets. When all of the assets and property are inventoried, they are then distributed to the heirs, as instructed in the will, after debts and expenses are paid by the estate.
Once the probate court declares the will to be valid, all beneficiaries are required to be notified within a certain period established by state probate law.
There are devices to avoid probate, such as setting up joint tenancy or making an asset payable upon death. In these circumstances, there are no formal notification requirements, unless specifically stated in the terms of the will.
In addition, some types of assets are not required to go through probate. These assets include accounts, such as pension assets, life insurance proceeds and individual retirement accounts (IRAs).
The county courthouse will file its probated wills and the wills are a public record.
A will is a wise plan. Ask a qualified estate planning attorney to help you draft yours today or learn the benefits of doing trust planning to avoid probate.
Reference: Investopedia (Nov. 21, 2019) “When the Beneficiaries of a Will Are Notified”