Probate is the court process of proving the validity of a will and distributing assets in accordance with the will's provisions. Probate also occurs when you die without a will and you have assets in your name alone. In summary, probate involves having the court appoint a "personal representative" (South Dakota's term for executor), who will then gather all of a deceased individual's assets, determine any liabilities that need to be paid, and distribute the remaining assets out to the heirs or other beneficiaries (also called devisees) named in the will. Typically, probate takes eight months to a year to complete. One of the reasons that probate takes so long is that, after starting a probate, we have to wait four months for potential creditors to make any claims they may have against the estate.
In South Dakota, if an individual owns more than $50,000 worth of assets or any interest in real property, in his or her name alone, at the time of his or her death, a probate proceeding will be necessary to transfer these assets out of the decedent's name and into the name of the decedent's heirs. A trust can help avoid probate, since assets can be transferred to the trust prior to death and then transferred to the beneficiaries through the administration of the trust after the individual's death rather than through the probate process. Also, beneficiary designations and transfer-on-death or payable-on-death designations can be used to avoid probate.
It is worth mentioning that probate often is not as bad as many believe. In South Dakota, for example, our access to the court system is very good. Hearings can be scheduled on the court calendar fairly quickly, and costs and attorney's fees are often substantially lower than in other jurisdictions. If a probate is uncontested, it can be administered informally, which means that no court hearings are required. Also, probate is a process that provides transparency for heirs and ensures that all of your final bills get paid in a timely fashion.