What is Probate?
Probate is a legal process that happens after an individual dies, even when a written Will exists. The process ensures that the deceased possessions/assets are managed and distributed to the appropriate people and any debts and taxes that are owed are paid in full. When a written Will exists, the probate court will check to see that it was properly signed and witnessed before carrying out the deceased’s wishes. The court does not do all this work by itself. The Will usually designates an executor to administer the distribution of the deceased’s assets. This individual will need to be approved by the court and could be a family member, friend, business associate, or even a probate lawyer.
What happens during probate?
Like people, no one probate estate is alike. Therefore, most probate cases involve the following steps:
- Determining the proper probate court and filing a petition to begin probate
- Notifying the heirs who are listed in the deceased’s Will or statutory heirs if there is no Will
- Petitioning the court to appoint the Executor designated in the Will or to designate an Administer for the estate
- Executor/Administrator performing an inventory and appraisal of the estate’s assets
- Paying estate debt to creditors
- Selling estate assets
- Paying estate taxes, if required
- Performing the final distribution of assets to heirs
As you can see, the probate process can become quite involved and burdensome of the deceased’s family members. When there is a well-planned and properly funded living trust in place, it may be possible to avoid going through probate court. However, the named Executor will still be responsible for distributing the deceased’s assets. A probate attorney can assist the Executor in performing these duties to ensure that they are completed in a timely and legally-acceptable manner.
Frequently Asked Questions
Because of the nature of the probate process, you or your heirs may have questions about it.
Will all my assets be administered through probate?
During probate, title is transferred from the deceased’s name to the names of their beneficiaries. However, not all assets go through probate, including:
- Property that is co-owned with the title “joint tenants with right of survivorship” that automatically transfers your share to the other co-owners
- IRAs, 401(k)s and other retirement accounts that have designated beneficiaries
- Life insurance policies
- Bank accounts with “in trust for” or “pay on death” (POD) designations
- Property owned by a living trust that allows the legal title of such property to pass to successor trustees without the need for probate
What if someone objects to your Will?
It is common for Wills to be contested by disgruntled heirs during probate proceedings. To contest a Will, the heir must first have legal “standing” to do so. For example, it could be a sibling who is upset that they have received a disproportionate share than their other sibling. A Will contest could also be a disagreement over who the deceased or court has designated as the Will’s Executor.
How long does probate take and how much does it cost?
The length and cost of going through probate will vary. It will depend on several factors, including whether a Will exists, the estate’s value and complexity, and the location of the estate’s real property. When Will contests and disputes with creditors come into play, the process can significantly take longer and be more expensive. Assuming there are no disputes during probate, it can take between nine to eighteen months to settle an estate. The costs for probate run between two to seven percent of the estate’s total value.
Common probate expenses include:
- Executor fees
- Probate attorney fees
- Court fees
- Accounting fees
- Appraisal costs
- Surety bonds
What if I am named an Executor for someone’s Will?
Being named as an Executor means that you are being entrusted with handling the deceased’s estate. You will be required to fulfill your fiduciary duties on behalf of the estate in the highest level of integrity. When people fail in this duty, they can be held liable for mismanaging the estate assets placed in their care. With such a responsibility, Executors are reimbursed by the estate for all legitimate out-of-pocket expenses that are incurred during the process of managing and distributing the deceased’s estate. It also means that it is always a wise choice to retain an accountant and experienced probate lawyer to assist in their duties.
If you still have questions about creating a Will, structuring a living trust to avoid probate, or choosing an Executor, our professional team is ready to help.