Probate is a legal process that pays debts owed by your estate and applicable death taxes, and distributes the remainder of your estate to your designated beneficiaries.
There are two kinds of probate: Living Probate and Death Probate.
Living Probate occurs if you become disabled and have not established a Living Trust to hold title to your assets. Under this condition, the probate court will decide how your estate is to be managed so your medical and nursing home care bills can be paid. This can include the decision to sell your home, for example, to pay nursing care expenses. The Living Probate process is, in and of itself, costly, lengthy, and stressful for your heirs.
Death Probate is also a consequence of not establishing a Living Trust. If your assets are not held in a Living Trust, the court will determine how to distribute your estate after you die, and after all the bills have been paid. This process is lengthy, and expensive for your family. Under death probate, your assets are subject to the discretion of the court and the lawyers appointed to administer it. It also leaves your estate open for public scrutiny.
The best way to avoid Probate is to have a Living Trust that holds title to your assets.