Recently, someone asked me, “what property goes through probate?”
That’s a difficult question. Whether or not a piece of property goes through probate can depend not only on what type of property it is, but also on other factors, such as the status of the property before the decedent died.
What is probate?
Probate is a court action where the heirs of a decedent ask the judge to distribute the decedent’s property. Even the simplest type of probate may take several months and cost thousands of dollars. If the probate is complex, or if someone contests the probate, the probate may take much longer and cost much more.
Real property
Frequently, real property needs to be probated. This is because ownership of real property is recorded in the county clerk’s office. Real property cannot be conveyed to another party unless the owner of record signs the conveyance. So, if the record owner is deceased, there will need to be a probate action. The judge must sign a probate decree, and the probate decree must be filed in the county clerk’s office. The heirs, listed in the decree, will then be the owners of record.
However, there are ways of structuring the ownership of real property so that it does not have to go through probate. These include: placing the property in joint tenancy with right of survivorship, conveying the property to a trust, and executing a transfer on death deed. To see ways to avoid probating real property, read my earlier blog post here.
Automobiles
The ownership of an automobile must be recorded with the Oklahoma Tax Commission. The OTC has created ways to transfer most automobiles without going through probate. To see how to transfer the automobile of a deceased person, read my post, “When a Motor Vehicle Owner Has Died, What Happens to the Vehicle?”
Cash and tangible personal items
State law says that personal property is subject to probate. However, you can often avoid probating tangible personal items. Most tangible items of personal property do not have ownership recorded anywhere, so, you don’t need the signature of a record owner to convey it. So, if a relative has died, and has left furniture and personal items in their home, the heirs can agree to who possesses the property, without going to probate court.
Property in the custody of another, or debt owed to a decedent
To simplify matters for small estates, Oklahoma has created the “small estate affidavit” to collect property in the custody of another, or debts owed to a decedent. Such property includes stocks, bonds, mutual funds, and money in the Oklahoma Unclaimed Property Fund. A small estate affidavit is also called a “Section 393 affidavit” because it appears in Section 393 of the probate procedure code. If a decedent’s estate is worth less than $50,000, all you need to do is give the person with custody of the property an affidavit that says:
· The estate of the decedent is worth less than $50,000;
· No probate case is pending in any court;
· Each claiming successor is entitled to payment or delivery of the property; and
· All taxes and debts of the estate have been paid.
The custodian of the property should then give you the property.
To read the law on small estate affidavits, click here. To read my blog post about small estate affidavits, click here.
However, if the estate is greater than $50,000, you will have to file a probate case.
Bank accounts
Often, bank accounts will have a “payable on death” beneficiary. If the account owner dies, the beneficiary will be able to withdraw money from the account.
If a bank account does not have a payable on death beneficiary, and the total value of the accounts at the bank is worth less than $50,000, submit an affidavit to the bank that says:
· There is jurisdiction
· The relationship of the heirs to the decedent
· The owner of the account left no will
· No probate proceedings are pending
· The persons seeking to collect funds are the heirs under the Oklahoma Intestate Succession Law.
All heirs, under the Oklahoma Intestate Succession Law, must sign the affidavit.
If the value of the accounts is more than $50,000, or if you can’t produce an affidavit that meets the above requirements, you’ll probably have to go through probate.
Click here to read the law on transferring funds in bank accounts.
Safe Deposit Boxes
If the deceased had a safe deposit box, you may collect the contents of the box if you submit an affidavit saying:
· There is jurisdiction
· The relationship of the heirs to the decedent
· The persons seeking to collect funds are the heirs under the Oklahoma Intestate Succession Law
· The decedent left no will
· The contents of the safe deposit box are the only known assets of the decedent.
All heirs must be present when the bank opens the box. If an heir is unable to be present, the absent heir must sign a form that says, "I hereby authorize (name of person) to act as my agent at the opening and transfer of contents of safe deposit box (number or other identification) at (name of financial institution)." The form must be dated and notarized. If the heirs cannot provide a key to the safe deposit box, the bank may charge the heirs its standard fee for drilling the box.
If you can’t comply with the above conditions, you’ll likely need to go through probate.
Click here to read the law on transferring property in safe deposit boxes.
Do you need to go through probate?
The law on probate is very complex. If you are still unsure about whether you need to go through probate, or if you would like to plan your estate so you don’t need to go through probate, the Persaud Law Office may be able to help you. We have assisted many families with estate planning and probate, and we may be able to assist you. Contact us today.
Photo courtesy of Nick Youngson CC BY-SA 3.0 Pix4free.