Probate is a challenging topic that is connected to lots of legal processes. However, even though there is so much due process attached to probate, most people know little, if anything, about it. This article provides answers to some of the most frequently asked questions about probate.
What is probate?
Probate is the legal process that takes place after someone dies. It includes proving in court that a deceased person’s will is valid, inventorying and identifying any property the deceased person had, having that property appraised, paying taxes and debts, and distributing the deceased person’s property as the will directs.
How does the probate process work?
The way that probate usually works is that after a person’s death, the person they named in their will as an executor (or if they died without having a will, the person appointed by the 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, creditors, and heirs are officially notified of your death.
Your executioner must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.
In most states, an immediate family member may ask the court to release short-term support funds while the probate proceedings lumber on. Then, eventually, the court will grant your executor permission to pay your debts and takes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
Does all property need to go through probate after a person dies?
The answer is no. Most states allow a certain amount of property to pass free of probate or a simplified probate procedure. Furthermore, property that passes outside of your will – like through a living trust or a joint tenancy – is not subject to probate.
Who is responsible for handling probate?
Usually the executor named in the will takes this role, but if there isn’t a will or if the will fails to name an executor, the probate court names someone (this person is called an administrator) to handle the process. Oftentimes, this job will go to the closest capable relative or the person who inherits the bulk of the deceased person’s assets.
If there isn’t a formal probate proceeding necessary, the court will not appoint an estate administrator. Instead a friend or close relative will serve as an informal estate representative. Normally, friends and families choose this person and it’s not uncommon for more than one person to share the responsibility of filing a final income tax return, paying debts, and distributing property to the people who are supposed to get it.
Should I plan to avoid probate?
Probate will rarely benefit your beneficiaries, and it will always costs them time and money. The only way probate makes sense is if your estate will have complicated problems, like many debts that cannot easily be paid off from the property you leave them.
Whether to spend your effort and time planning to avoid probate will depend of a number of factors, most notably your health, age, and your wealth. If you’re in good health and your young, and end up getting a complex probate-avoidance plan right now, you will have to get another one as your life situation changes. Also, if you don’t have a lot of property, you may want to spend your time planning to avoid probate because your property might qualify for your state’s simplified probate procedure. If, however, you’re in your 50’s or older and are in ill health, or if you own a significant amount of property, you most likely want to do some planning to avoid probate.
What sort of assets need to go through the probate process after you die?
Any asset you own at death that does not pass under the terms of a separate contract will need to pass through probate in order to be distributed to your heirs. For a lot of people this means all or most of their assets will need to go through the probate process. Other people, due to the nature of their possessions or through careful planning may have few or no assets that need to go through probate upon their death.
Common items that are passed through probate under your will include:
- Household furnishings
- Automobiles, boats, or other vehicles titled in the name of the deceased
- Checking or Saving accounts titled in the name of the deceased
- Photos and mementos
- Any interest in real or personal property held by the deceased, which aren’t distributed “non-probate” under the terms of a separate contract
Where does the probate process take place?
Generally, the probate process takes place in the county of the estate in the decedent was domiciled at their death. If the decedent owned property that passes under the terms of their Will in any other counties, then probate may also need to take place in those counties as well. So, if somebody owns properties in multiple states, and if that property is passed according to their Will (as opposed to under the terms of a Trust or by the language of a deed) that property will need to go through probate in the county and state where the real property is located.
What kind of assets commonly pass to your heirs outside your Will?
By planning ahead, you can pass some of your assets as “non-probate” to your heirs according to the terms of the contract that are specified between you and the company who holds your insurance policy, retirement account, or brokerage account. The reason why this doesn’t involve the court is because the contract between you and the financial institution dictates who owns the account or insurance policy.
Probate is a confusion topic to a lot of people and can be frustrating to deal with. If you or someone you know is dealing with a property that’s passing through probate, give us a call at 713-322-3861 and we’ll be happy to assist you.