“Probate” is defined as “the legal process of distributing a dead person’s assets”. But usually when we talk about probate, we are talking about the court system. In most cases the distribution of your assets will need to go through probate court. This can be costly and time-consuming. There are good reasons for what seem to be overly onerous requirements – the fear that those who are entrusted with managing the affairs of a deceased person will abuse that power to benefit themselves. A notable recent example involved a lawyer named John Fairbanks, who it was discovered had embezzled hundreds of thousands of dollars of his clients’ money. But most of us do not have estates of that size, and we want to be able to pass on what we do have to our loved ones as inexpensively and quickly as possible.
Therefore, we seek to do so without the involvement of the probate court. The first question is whether a will is necessary. It is not, but not having one does not avoid probate. And it can result in property going to the wrong people. In New Hampshire, as in every state, the Legislature has told us where your money and property go if you do not have a will – a lengthy list, but if your spouse and/or children are alive, to them, then to parents or other relatives if either the spouse or children are not alive, and ultimately, if no close relative is alive, to the State. So the two biggest concerns if you have no will are if you have a significant other but you are not legally married, or you are legally married to someone from whom you are estranged, or have children and are estranged from them. In the first case, the person you most want to inherit your assets will not be able to; in the second the person(s) you least want to inherit will. An easy but risky way to ensure that assets are transferred to those you want, but probate involvement is avoided, is to put all your assets into joint ownership with the person(s) – your spouse, your children, etc. you want them to go to, or, in the case of life insurance policies or retirement accounts, name that person(s) as your beneficiary. It is risky because if property is jointly owned, that person has access to it before you die, and can misuse their access. Or, if circumstances change (divorce, estrangement, etc.) and you do not think to contact your insurance company, investment manager, etc., the beneficiary you originally named will remain legally entitled to inherit the full amount.
For the same reason, although another solution is to simply give your property away but retain a right to use it before your death, a change in your relationship with the person you gave it to may have terrible consequences for you and those you love. There are also tax consequences and potential disqualification from Medicaid or other government benefits of giving away your assets. For all of these reasons, most experienced probate lawyers recommend creating a trust to hold all of your assets. The Trustee you name can avoid the probate process and simply distribute the assets as directed by the Trust document. Such a trust can be revocable or non-revocable – in other words, you either retain the right to change it or you do not. This is an important decision which has tax and government benefit consequences, and probate lawyers have different opinions on the subject, so it is important to find out where the lawyer you consult stands, and why.
As a lawyer who often represents the families of people killed by the negligence of others (wrongful death) I have one important additional warning. If you are considering bringing such a case, someone must be appointed as the legal representative of the Estate, with authority to file a lawsuit. Only the probate court can do that, and, as with everything else involving the probate process, it takes time. In most cases, you must bring such a legal action within three years of the alleged negligence, so even if the Estate’s affairs were settled soon after your loved one’s death, you should not delay the process of being appointed. This is a fairly simple process which does not necessarily require that you hire a probate attorney; I often do this as part of my representation in the wrongful death case. But again, it takes time, and there are reporting requirements, so if there is any potential for such a claim, you should preserve financial and other records until you have made a decision.