Introduction
The word “probate” might sound intimidating, especially for those who have heard tales of lengthy and complex legal procedures often associated with bureaucratic hurdles. This aversion to probate is particularly common among United States residents or expats. In the US, it’s a common practice to avoid probate by creating a trust, which is a routine element of estate planning there. This leads to a common misconception among American immigrants to Israel: the belief that they should also strive to avoid probate here. Thus, it’s important to understand that in Israel, trying to get around probate is both unnecessary and essentially impossible.
What Exactly is Probate?
Let’s start by explaining what probate is. Probate is the process that a Will goes through after someone passes away. An inheritor can’t just take a Will and hand it to the bank or the land registry and transfer assets to their name. The Will must first be officially recognized as the last valid Will of the deceased. This process is called probate.
Why You Cannot Avoid Probate in Israel
Probate in Israel is an essential step in transferring assets and rights to inheritors. Whether it involves bank accounts, real estate, or other assets, you would need a probate order (when the deceased had a Will) or an inheritance order (if the deceased did not have a Will) to transfer ownership to the inheritors.
Even in the case of a joint bank account, you would still need a probate order. In Israel, there are no provisions for “transfer on death” or “rights of survivorship” arrangements, nor can you name beneficiaries on your bank account. The surviving partner does not automatically become the full owner of the joint account, even if the partners signed a סעיף אריכות ימים (“se’if arichut yamim”; also known as a “survivorship clause”, which enables the surviving spouse to continue using the account for regular expenses until the probate order is obtained).
Similarly, the ownership of real estate, including even a couple’s primary residence, requires probate to allow legal transfer of ownership to the heirs. Typically, the home would be registered under the name of both spouses. When one spouse passes away, his or her portion of the property (50 percent) becomes part of the estate and is distributed according to the Will. It does not automatically transfer to the surviving spouse, and the surviving spouse would not be able to sell the property without registering the probate order.
Some people mistakenly believe that if they “add one child” to the bank account or to the property title, then this would allow for smooth transfer after they pass away. This is simply not true, and can actually cause more harm than good.
In the US, trusts are a commonly used tool to avoid probate. In Israel, however, trusts are not very common and are not very user-friendly. That said, they can be a very important and useful tool in special circumstances (e.g., if the beneficiary is a minor or a person who has a disability, significant debt, or is in an unhealthy relationship, to name a few).
You would not want to try and manage your Israeli checking account, for example, via a trust account. The same is true for many other assets. The hassle of transferring assets to a trust, simply to avoid probate, is by far greater than the hassle of probate itself.
Why You Don’t Need to Avoid Probate in Israel
Contrary to popular belief, probate in Israel is not the bureaucratic nightmare it might seem to be. First, it isn’t an expensive process. In fact, in many cases, you don’t even need to hire a lawyer, and the heirs can probate the Will on their own (there are, however, times that it would be a good idea to use a lawyer). Second, if the Will isn’t very complicated, the probate order is usually granted within 2-3 months of filing the request.
What Should You Do?
Rather than try to avoid probate, what you want to do is put a good plan in place by having a well-thought-out Will prepared and signed.
Many people may not be aware of how many options a Will can offer them.
For example, in Israel, you can list a first beneficiary (e.g., your spouse), and then a second beneficiary (e.g., your children), who would inherit AFTER your spouse passed away (a “two-step” inheritance).
You can also include limitations for use and sale of your assets, as well as contingencies for inheritance. A couple can choose to create Mutual Wills, which would allow them to impose limitations on when and how the Wills could be changed in the future. While this type of arrangement isn’t suitable for all couples, it’s best to know all the available options and then make an informed decision as to what works best for you.