When A Person Dies, Does All Property Have To Go Through Probate?

Does everybody have to go through probate? Meaning do all of our assets upon death need to go through the probate process? There are two major categories of assets that are going to be triggering the court process.

The first one is real estate. If you own real estate individually, in your name alone, whether you’re the only owner of the property or if you own a percentage interest as a tenant in common, not a joint owner, so a tenant in common owner, and that will be subject to probate when you pass away. We, of course, on the estate planning side can take care of that issue, but if you do die with real estate in your name alone it will trigger that court process called probate.

Now, real estate is not just your primary residence. It includes time shares, deeded time shares, and includes oil and gas that’s been deeded to you, and any vacation homes or other pieces of real estate. Now keep in mind that probate is triggered, that court process is triggered, where the real estate is located. If you have your primary residence here in Colorado, some oil and gas in Nebraska, and a beach home in Florida, and they’re all in your name alone if you pass away that just triggered a probate at the situs of where the real estate is located. So that means we’re going through probate here in Colorado, an ancillary probate in Nebraska potentially, and an ancillary in Florida to deal with your beach house down there. It’s very important that if you have real estate in more than one state or real estate in general in your name alone that you see an estate planning attorney. That’s just the first category that triggers probate.

In Colorado, the other thing that will trigger probate is if your assets in total equal $66,000 in 2017 or more. $66,000. That number seems low, so you’re probably thinking everybody must then go through probate. If that’s including the face value of life insurance, retirement accounts, your checking and savings, then everyone’s going through this process. The good news is that not everything counts towards the $66,000. Assets that are held jointly, so, for example, my husband and I have say a bank account with $100,000 in it, and we own it jointly. If I die it’s over $66,000 but we don’t need a judge to help us transfer that asset. We already know where it’s going. It’s going to the other joint owner on the account. So that account if it is held joint will not be included in the probate process.

The other thing is if you have a beneficiary on an account, or sometimes called a POD, payable on death, or TOD, transfer on death, that account will also not be included or counted towards the $66,000. I’ve got $100,000 in the bank, I’m not married and I’ve designated my brother as the beneficiary on that account. When I die, I don’t need a judge to help me figure out where to transfer that asset, it’s going directly to the beneficiary that’s on file and it will not be subject to that probate process.

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