Is Probate Really Necessary?

I got a call a few days ago about an estate that included several joint tenancy bank accounts and one account that was in the decedent's name only. The good news was that the joint tenancy accounts avoided probate. The bad news was that account that was in the decedent's name only had a balance of $102,000. The caller knew from my web page about probate that if the probate assets in an estate total less than $100,000, no probate is required due to the small estates exception. But if the assets total more than $100,000, probate is required.

Surely, the caller pleaded, there must be some way to bring this account under the small estates law and avoid probate. The difference, after all, was only $2,000. And that $2,000 was going to cost the caller a legal fee of at least $4,000, and court costs of somewhere between $600 and $800.

The answer, however, is that if the assets in the probate estate amount to more than $100,000, a probate is required. Who enforces this? The bank, believe it or not, because it won't hand over the account to anyone else without seeing a probate court order first.

There are many ways to avoid probate in this situation, such as a joint tenancy account, or a pay on death (POD) account. Even a simple trust would work in this situation. But if you don't take advantage of any of these procedures, your heirs will have to start a probate.