Understanding Probate: A Friendly Guide to What It Is and How to Avoid It

Two questions that I’m often asked are: “What is probate?” and “How do I avoid it?”

Let me break this down in simple terms. Probate court is the court in South Carolina that’s been given the job of protecting assets and handling affairs for people who can’t take care of their own business.

This happens in several situations. First, when minors inherit money – kids are legally considered incapacitated until they turn 18, so if a child inherits something, the Probate Court has to step in and manage it for them. 

The Court also gets involved when adults can no longer handle their own affairs, whether that’s their person or their money and assets. For example, if someone falls into a coma, the Court will need to step in – unless that person was had planned ahead enough to set up a power of attorney and healthcare power of attorney beforehand. The Court also handles involuntary commitments.

But the most common situation, and the one most people think about, is when someone passes away. From a legal standpoint, death makes you incapacitated, so the Court has to step in.When someone dies owning assets or owing debts, and if there’s no other mechanism in place to handle these things, that’s when Probate Court comes into the picture. Now, everyone says, “Oh, I’ve got a will, so I’m all set.” Well, yes and no. Here’s the thing about wills—they’re basically like someone walking into court, putting their hand on a Bible, and giving testimony to the Court about what they want done with their stuff.

In other words, a will is essentially guidance to the Probate Court about what the deceased person wanted. It’s not actually doing the work; it’s just giving instructions on how the work should be done. Here’s why that matters: when someone dies with assets still in their name, somebody has to be legally authorized to act on behalf of the decedent. That’s what the whole probate process is about. In South Carolina, we call this person the “personal representative.” Other states might call them the “executor” or “administrator”; same idea, different names.

So naturally, the second question is: “Okay, can we avoid probate? And if so, how?” The answer is yes – in many cases, you absolutely can. There are three main ways to transfer assets without going through probate. Let me walk you through them.

First: Transfer by Operation of Law. This includes things like joint ownership with right of survivorship; when one owner dies, the asset automatically goes to the surviving owner. Life estates work the same way. But here’s a catch: not all jointly held assets automatically transfer to the survivor. Some are held as “tenants in common,” which is basically like a partnership. In that case, the decedent’s share doesn’t automatically go to the other owner.

Second: Transfer by Operation of Contract. These are assets like life insurance policies, beneficiary designations on your 401(k) or IRA, or setting up your bank accounts as “payable on death” or “transfer on death.”

Third: Trusts. Think of a trust like a corporation that holds your assets. Since the assets are already in the trust; there’s no need for probate. 

The bottom line? With a little planning ahead of time, you can avoid probate completely or at least for most of your assets. The key word here is “planning”, you’ve got to set these things up before you need them.