When you die, the court will step in and review the estate before they allow the executor to distribute any assets. Understanding a little bit about how this process works will help you design your estate to easily help you overcome this hurdle. The longer it takes, the longer your loved ones will have to wait to get the assets you want them to have.

The process of reviewing your will and estate by the court is called "probate." The court in the state in which you live when you die will review the will to see whether it is authentic and consistent with state law. It will consider any arguments from people who feel the will should be overturned or from a spouse who is exercising the right of election. The courts will also make sure that all debts are settled, and that all taxes are paid. Once the will is validated and the executor can satisfy the courts that all claims have been paid, then he or she is free to pay out the balance of the estate to the beneficiaries in the will.

Based on the complexity of your estate and whether you owe estate taxes, probate can take a long time. Typically, the probate process takes a few months to a year. Remember, your heirs will not get their inheritance (money they might need to live on) until the process is complete.

Minimizing the Delays in Probate

If you want to streamline the probate process, and make sure that you get the assets to your loved ones as soon as possible, follow these steps:

1. Have a Valid Will

This is the single most important thing you can do to speed up the probate process. When you die without a will (as discussed later in this section), the courts will appoint attorneys and accountants to serve as administrators for the purpose of valuing your estate and supervising the process of liquidating it. These individuals are paid from estate property, which will reduce the amount of the inheritance going to your heirs. If you have a will and an executor, the chances of speeding through probate improve immeasurably.

2. Consider Placing Out-of-State Real Estate in a Trust

Each state in which you own real estate (property) has the right to probate your estate. This can be expensive, especially if your executor has to travel back and forth to represent the estate. Talk to an attorney or other estate planning professional about placing the real estate in a trust while you are still alive. This will still enable you to enjoy the property, yet remove it from your probate estate.

3. Make Sure You Have Adequate Insurance and Other Non-Probate Property

Even if you expect to leave behind a large amount of wealth for your family, if all the assets are probate assets, you may be creating a situation of hardship while the courts are reviewing the estate. Look to see which of your assets are non-probate assets (i.e., assets in joint name, pensions, IRAs, or life insurance not made payable to your estate). If you think the remainder of your estate is less than adequate to provide for your family during probate, then you may want to buy additional life insurance. Remember, do not make the insurance payable to you or your estate as this can create estate tax exposure.