Probate - Probate Overview

Probate Overview

Probate is the legal process that takes place after someone dies. It involves the judicial determination of whether a Will is valid and the process of settling/administering an estate under the supervision of the probate court.

Administering an estate is the process by which assets are gathered, applied to pay debts, taxes and expenses of administration, and distributed to those designated as Beneficiaries in the Will. The Executor or Personal Representative named in the Will is in charge of the process.

If no formal probate process is required, the court does not appoint an estate administrator. Rather, a close relative or friend serves as an informal estate representative, and often more than one person shares the responsibility of paying debts, filing a final income tax return and distributing property to the decedentís Beneficiaries/Heirs.

Probate law generally provides for partial distribution during the administration process. Many attorneys encourage probate avoidance techniques due to the perception of long and costly probate process. However, most states allow a certain amount of property to pass free of probate, and many states now offer simplified or streamlined probate processes for qualifying estates.

The Uniform Probate Code (UPC) was created to modernize probate law and probate administration and to encourage the uniformity of probate codes in all states. Unfortunately, less than half of the states have adopted the UPC in its entirety. The rest of the states have only adopted parts of the code. Visit Us at Google+ Copyright

Probate Process

Probate can be divided into three main stages.
  1. After filing a Probate Petition in the county where the decedent was living at the time of his/her death to start the process, the Executor must identify, collect, inventory, and have appraised all the property and assets of the deceased that is subject to probate.
  2. Next, creditors are informed of the decedentís passing and notified of the specific timeframe they have in which to submit their claims against the estate. Taxes, estate expenses and valid creditor debts are paid out of estate assets.
  3. After the bills have been paid, the remainder is distributed according to the instructions in the decedentís Will. When the decedent dies intestate, state intestacy succession laws determine how the estate will be distributed.
The probate process typically involves paperwork and court appearances. Associated fees are paid from the estate assets.

After you die, the person you named as Executor in your Will files papers in the local probate court. If you die intestate, the judge will appoint an Administrator. Your Executor oversees the administration of your estate during the probate process, which can take from a few months to two years.; in some cases, even longer.

The probate process includes the following:
  • Verifying in court that a decedentís Will is the valid, final dispositive statement of the decedent;
  • Identifying and inventorying the decedentís property;
  • Having the decedentís property appraised;
  • Paying debts and taxes; and
  • Distributing the remaining property as the Will (or state law for intestate situations) directs.
For more information regarding typical Executor duties, please visit Estate Executors and Administrators.

Although probate laws vary from state to state, payments from your estate are routinely paid in a certain order:
  1. Estate administration costs/expenses (legal advertising, appraisal fees, personal representative fees, attorney fees, etc.);
  2. Family allowances (for support of family members);
  3. Funeral Expenses;
  4. Taxes and other debts;
  5. All remaining claims; and
  6. Distributions to the Beneficiaries/Heirs.

Avoiding Probate

Many types of property routinely passes outside of the probate process: life insurance and retirement plan proceeds which pass to a named Beneficiary; and real estate, bank, or brokerage accounts held in joint tenancy with right of survivorship.

Living Trusts are also touted as an effective way to avoid probate, although they generally are unable to completely avoid probate. And a Simple Will is still required to pour over any property into the Trust that wasnít moved into it prior to the decedentís death.

The value of avoiding probate can be disputed, since probate laws vary from state to state. In some states there are court or attorney fees mandated by statute, although in other states these fees can be minimal. In addition, many states have now expedited or simplified their court proceedings to make them more efficient and less costly for small or simple estates. Each state defines a small estate differently. Even many larger estates qualify for special transfer procedures that speed up the passage of property to Beneficiaries.

In some states, a properly drafted Will can eliminate some of the steps that would otherwise be required in the probate process. Further, some of the delay and extra red tape associated with probate is due to tax laws and filing requirements and this cannot be eliminated through a Living Trust and the avoidance of probate. Living Trusts may incur additional costs as well, such as Trustee fees, real estate transfer taxes and the like.

Probate Shortcuts for Small Estates

  • Claiming property with Affidavits. If the total value of an estateís assets meets certain guidelines, your personal property may be able to completely skip probate. State law, which varies greatly, determines the qualifying amount.

    If your estate meets your stateís guidelines, a Beneficiary/Heir can prepare an affidavit stating that he/she is entitled to a certain item of personal property under a Will or state law. Upon receipt of the affidavit and a copy of the death certificate, the individual or institution holding the property may release the asset(s).
  • Simplified Court Procedures. Another option for small estates is a faster, more streamlined version of probate. This pared down probate process is often even simple enough to handle without an attorney, which saves money too.
Whether or not one should plan to avoid probate is probably best decided on a case by case basis. Various factors should be weighed: age, health, and the size and value of your estate.

Top Reasons to Avoid Probate

  • No immediate access to cash.
  • A Probate Judge can interfere in family and financial matters, such as continuing or selling the decedentís business; repairing or selling real estate; or abandoning worthless assets.
  • Costly and increasing probate fees. Attorney and court fees can easily take up to 5% of an estateís value.
  • Probate Records are Public Records. All the information about the decedentís assets, liabilities, Beneficiaries, and Personal Representatives are a matter of public record.

Links to State Probate Codes and Statutes

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