Common questions from a newly entrusted/appointed Personal Representative are “What is probate?” – “Why do we need it?” – “Do we have to probate?“.
Probate is a rather formal procedure, establishing the validity of the Will and is the official “proving” of the Will. Fortunately, not all Wills need to go through probate; such a determination will be dependent upon a testator’s unique situation. Probate asks for the court’s involvement. The process can have a large range of both cost and time required to complete, depending on the complexity of assets, debts and disputes.
Whether to spend your time and effort planning to avoid probate may or may not be an appropriate goal; depending on the size and complexity of your estate. Even if avoiding probate isn’t necessary, putting a plan in place for the care of children and distribution
of assets, is important to prevent disputes among family and to provide for loved ones. Regardless, the more information you share with your attorney and your personal representative, the more likely you are to have an estate plan that best fits your needs.
This guide is not intended to be a substitute for specific individual tax, legal, or estate settlement advice, as certain of the described considerations will not be the same for every estate. Accordingly, where specific advice is necessary or appropriate, consultation with a competent professional is strongly recommended.
Probate is a legal process where your named Personal Representative goes before a court and does several things:
- Identifies all property owned by the deceased.
- Appraises the property and pays all debts and taxes.
- Proves that the Will is valid and legal and distributes the property to the heirs as the Will instructs.
Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person’s property.
Probate usually works like this: After your death, the person you named in your Will as Personal Representative or, if you die without a Will, the person appointed by a judge, files papers in the local probate court.
The executor proves the validity of your Will and presents the court with lists of your property, your debts and who is to inherit what you’ve left. Then relatives and creditors are officially notified of your death.
The primary function of probate is transferring title of the descendant’s property to their heirs and/or beneficiaries. If there is no property to transfer, there is usually no need for probate. Another function of probate is to provide for the collection of any taxes due by reason of the deceased’s death or on the transfer of their property.
The probate process also provides a mechanism for payment of outstanding debts, taxes of the estate, for setting a deadline for creditors to file claims (thus foreclosing any old or unpaid creditors from haunting heirs or beneficiaries) and for the distribution of the remainder of the estate’s property to ones’ rightful heirs.
The duration varies with the size and complexity of the estate, the difficulty in locating any beneficiaries of the Will, if there is one and under the law.
If there is a Will contest, or anyone objects to any actions of the Personal Representative, the process can take a long time. Some matters have taken decades to resolve.
Typically the person named as the deceased’s Personal Representative (a more formal term is “Executor” or “Executrix”) goes to an attorney experienced in probate matters, who then prepares a “Petition” for the court and takes it, along with the Will and files it with the probate court.
The lawyer for the person seeking to have the Will admitted to probate typically must notify all those who would have legally been entitled to receive property from the deceased. If the deceased died without a Will, plus all those named in the Will and give them an opportunity to file an objection to admitting the Will to probate.
A hearing on the probate petition is typically scheduled several weeks to months after the matter is filed.
Depending on who the named beneficiaries are, how long before the death the Will was signed, whether the Will was prepared by an attorney, who supervised the “execution” of the Will and/or whether the Will was executed with certain affidavits, it may be necessary to bring in the persons who witnessed the deceased’s signature on the Will.
If no objections are received and everything seems in order, the court approves the petition, appoints the Personal Representative, orders that taxes and creditors be paid and requires the Personal Representative to file reports with the court, to assure all the deceased’s property is accounted for and distributed in accordance with the terms and conditions of the Will.
In most circumstances, the executor named in the Will takes this job. If there isn’t any Will, or the Will fails to name an executor, the probate court names someone (called an administrator) to handle the process – most often the closest capable relative, or the person who inherits the bulk of the deceased person’s assets.
If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative. Normally, families and friends choose this person, it is not uncommon for several people to share the responsibilities of paying debts, filing a final income tax return and distributing property to the people who are supposed to get it.
Probate can be costly and time-consuming, but sometimes strategies to avoid probate can be even more costly or have other downsides. Sometimes probate is the most efficient option. The answer varies depending on which state you live in, what assets you have and where you would like those assets to go upon your death.
One option to avoid probate is to transfer all of your assets into a revocable living trust, of which you are the trustee, which contains many of the same directions and guidelines as a Will. There are many benefits and drawbacks to doing so, so seek guidance from an experienced estate planning attorney regarding your specific situation.
One instance where the benefits often outweigh the drawbacks is if you own real estate in more than one state. Typically, an estate will need to go through probate in each state in which you own real property, so expenses can add up quickly.
Another instance where a trust may be of help is if you are elderly or disabled and want a better mechanism than power of attorney for someone to manage your assets for yourself or your family.