When Is Probate Required? Massachusetts Law and Probate Alternatives

People during their lives focus on squaring away their estates to achieve all sorts of goals; to avoid inheritance taxes, to survive the MassHealth look back rules, or maybe simply to forego the probate process. Some, of course don’t plan for anything at all. And despite what many may think, due to loopholes in Massachusetts law, there are still many ways that both “planners” and “non-planners” can avoid probate. This article contains both basic information, and some little known probate avoidance secrets that only specialized practitioners in Massachusetts know about.

Non-Probate Assets – Planned for Probate Avoidance

A discussion on when probate is required would not be complete without mentioning the fundamentals. These are the types of assets that we as probate attorneys review with all of our clients who are seeking strategies for probate avoidance, and are mentioned frequently throughout the cape-law.com website:

• Assets in a Trust – Any property placed under the ownership of a valid Massachusetts trust, whether a piece of real estate, a stock portfolio, or a bank account, will not need to be probated through the courts.
• Jointly Held Assets – Any assets that are held in the name of more than one person will automatically pass to the surviving owners upon the death of one. This again is commonly the case with bank accounts and most jointly held real estate.
• Beneficiary Designations – Most often used on all kinds of financial accounts, a beneficiary designation is usually simply a form on which the account holder directs the financial institution to pay to another upon his or her death. This is sometimes referred to as “POD or TOD (Payable or Transfer on Death). Deposits with assisted living facilities may also use these forms.

Probate Isn’t Necessary for Massachusetts Bank Deposits Less Than $10K

If at the time of someone’s death, they have nothing more than some money, say $9,000 in a checking account, then any Massachusetts bank may technically release that amount of money to the decedent’s surviving spouse or next of kin (with some proof of death and ownership of course). Most banks are not aware of the Massachusetts statutes that allow them to do so, however, so trying to withdraw this money might take a little extra legwork and communication with the bank’s legal department. Even so, banks aren’t necessarily required to release these deposits, and aren’t allowed to do so for 30 days after the date of death. An attorney on your side might help things along a bit.

Some banks will require that the would-be payee file for a form of “probate light” now known as “Voluntary Administration.” This is generally a simple method for legal property distribution when estates are less than $25,000 in value. The process still involves court interaction, but the costs and formalities are much lower. We’ve described this process and how it differs in our review of the new Massachusetts Probate Code here.

Wages and Salary for the Intestate Estate – No Need for Probate

If a person dies “intestate,” or without a will, that person’s employer can pay his or her wages to the surviving spouse or next of kin without requiring probate of the estate. The amount of money they’re permitted to pay, however, is not much at all so that most families will not find these statutes of much use. For any private employer, the amount of wages that may be paid to family in this manner is capped at $100.00. For employees of the Commonwealth of Massachusetts, however, or any of its “political subdivisions,” that amount is increased to $500.00. Much like the statutes on bank deposits, the Commonwealth does not require employers to pay families outside of the probate process, but rather it protects them up to a certain amount when they do.

Payments and Reimbursements from Health Service Corporations

There are frequently bills that an individual will incur for some kind of medical care in the weeks and months before passing away. And of course we all know that getting reimbursed for medical expenses by a hospital or insurance provider can take time, sometimes an inconveniently long time. In such instances, if a person dies before the reimbursement is processed, that health service corporation may pay outstanding amounts to the decedent’s surviving spouse or next of kin after 60 days have passed.

As with the Massachusetts statutory provisions on wages and bank deposits, naturally, the amount of money that may be reimbursed directly to such a qualifying family member is capped, in this instance at $2,000. And again, keeping in mind that these corporations are often extremely large and bureaucratic, it may be quite a chore to navigate communications towards someone who understands these particular provisions in Massachusetts law.

Automobile Transfers not Requiring Probate

Transferring a vehicle outside of probate is easiest by far when the decedent is married. Massachusetts has a statute that simplifies this transfer, and unlike many of the above “secret” provisions, this statute is relatively well known. The Registries of Motor Vehicles throughout the state in fact have a very simple application process, much like the traditional application for a new title, that will result in a new title issuance in the surviving spouse’s name. For any other family member, unfortunately, a probate (or voluntary administration) will be required to transfer ownership.

In fact, the laws of Massachusetts make other allowances with respect to motor vehicles without the need for probate. The registration of a vehicle, for example, is considered valid even after the registrant’s death until the earlier of the registration’s expiration date or a transfer of the title. Similarly, any automobile insurance policy still in force on the vehicle will cover all related persons to the decedent until the personal representative is appointed, at which point it will then cover that representative.

Closing Considerations

Foregoing the probate process is almost always a more straightforward and convenient option for surviving family members. Still, it never hurts to enlist the advice of an attorney who focuses in probate work, even if only at the beginning for a little bit of guidance. Please feel free to call our office at 508-888-8100 or visit the contact us page with any questions you may have on when probate is required or broader issues.