When looking at the rules for probate proceedings, certain details tend to stand out. For example, those hoping to bypass or streamline the probate process generally have to show that an estate is relatively small to qualify for that option.
A small estate affidavit can reduce the amount of probate oversight involved in estate administration. Real property is typically one of the types of assets that make probate proceedings essential for an estate and disqualify it from a small estate affidavit.
Does that mean that real property must always pass through probate court when an owner dies?
People can make plans in advance
It is actually possible to keep real property out of probate court. Typically, people achieve that goal by changing ownership so that the home doesn’t become part of their estate after they die.
Only resources that belong solely to the decedent become part of their estate. Joint ownership is therefore one of the strategies that can help high-value assets bypass probate proceedings. If a homeowner executes a deed establishing joint tenancy with rights of survivorship, the other party who outlives them automatically inherits their share of equity in the property.
Other times, it might be possible to establish a transfer-on-death deed in advance to allow the property to immediately transfer to a new owner when the current owner dies. People also sometimes transfer ownership of their homes to trusts, which can also keep them out of probate court.
The goal for trying to bypass probate court might be to protect an asset from creditor claims, reduce the taxable value of the estate or prevent delays in ownership transfers. Discussing different options as part of the overall estate planning process can help people achieve their goals and ensure the right person inherits their property.