Definition
The court process that validates a will (or applies state law without one), pays the estate's debts, and distributes what remains. It is public, can take months to over a year, and costs fees; assets with beneficiary designations or held in trusts and joint accounts skip it entirely.
Why it matters
Probate is why beneficiary forms on retirement accounts and life insurance beat instructions in a will: designated assets transfer in weeks while probated ones wait on a court. An outdated designation also overrides the will, a common and painful surprise.
Example
An estate passes a $400,000 house through probate over ten months with several thousand dollars of court and legal costs. The same person's $250,000 401(k) reaches its named beneficiary in a few weeks, no court involved.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.