By Mia Poliquin Pross, Esq.
Probate is a court process to appoint someone (called the “personal representative”) to settle the financial affairs of a deceased person, and to distribute the probate assets according to that person’s will, or according to Maine’s intestacy laws if there is no will.
Many people think that if you have a will, your estate won’t have to be probated. That is not true. It’s not the will that determines whether probate is necessary. It’s generally what you have for assets and how those assets are titled that determines whether those assets will “pass through your will” and whether probate is needed.
First, jointly titled assets do not have to go through probate – when one owner dies, those assets automatically pass to the other joint owner. For example, most married people jointly titled their house, cars, and bank accounts so there’s usually no probate upon the death of the first spouse. (As an aside, I often see elderly people jointly title bank accounts with an adult child, and I typically do not recommend that for a variety of reasons. If it’s for access to a bank account in an emergency, a Durable Financial Power of Attorney is a better way to accomplish that goal.)
Second, assets that have a beneficiary designation will go to the named beneficiary and not be subject to your will or probate. For example, if you name beneficiaries on life insurance policies, annuities, and retirement accounts, those assets will go directly to the beneficiaries. Many people don’t realize that they can also name a “pay on death” beneficiary on bank accounts, savings bonds, and other financial products if they wish.
Third, assets that are not owned by the decedent and instead are legally owned by a trust, would be distributed according to the terms of that trust, and usually not be subject to the will or the probate process.
Finally, sometimes the estate is just too small to go through probate. There’s a simplified process in Maine for administration of estates that do not contain real estate and that are valued less than about $40,000. But if there’s real estate titled to the decedent’s name alone (regardless of value), that generally requires probate unless there’s a Transfer on Death Deed in place, which is like naming a beneficiary on your real estate. That option became available in Maine in 2019 with the passage of the new Probate Code.
Bottom line: sometimes it makes sense to arrange your assets to avoid probate, and sometimes it does not make sense and it’s better for certain assets to pass through your will and the probate process in order to be distributed. A qualified attorney can help you carefully consider your specific asset mix and your ultimate wishes and then design an estate plan to accomplish your individual goals.
Originally published in Sun Journal, Estate and Funeral Planning special section, April 28, 2022.