Probate and the Probate Process

Probate is a process that starts at your death. This process transfers title of your assets to your beneficiaries. A person’s estate is Probated if they die with a Will or they die intestate (without a Will). During this process, your creditors can make claims against your estate and anyone not satisfied with your Will can contest it. The Probate process is different in each state; however, there are some fundamental steps that occur everywhere.

If you die with a Will, Probate will follow these fundamental steps:

  1. When you had your Will written, you named an executor – your personal representative. Once you die, your executor typically files the Will and a petition with the Probate court in your county. If you die intestate, you will not have made plans for an executor, so the court will appoint an administrator.
  2. Some state laws require the executor to locate the witnesses to the Will. Once found, these witnesses may have to state under oath that they witnessed the signing of the Will before it can be offered for Probate.
  3. Next, the executor sends a legal notice to everyone in the Will, heirs, and others required by law, that it has been offered for Probate.
  4. Anyone not happy with your Will now has the opportunity to challenge the contents of the Will or the appointment of Executor.
  5. If no one objects to the appointment of the executor, the judge formally appoints the executor. If there is an objection, the judge has the option to choose someone else for this task.
  6. Next, the executor must make a list of all the assets and liabilities (debts) of the estate.
  7. Before any assets get transferred to heirs, the executor must pay all debts and taxes and file appropriate tax returns. The executor will also be paying certain expenses such as the burial, legal fees, etc.
  8. When all debts have been paid, the executor transfers the assets to the heirs.
  9. Once everyone has received their inheritance, the executor accounts to the court and the judge closes the estate and releases the executor.

Why You Want to Avoid Probate

In some states, Probate is not traumatic if the estate is planned properly. However, there are many reasons why you might wish to avoid Probate. Let’s look at five of them.

  1. You may forfeit your privacy. The existence of your Probate proceedings will be published in local newspapers and anyone wanting to know more about your probate information can then find it at the local courthouse.
  2. It takes time. During the Probate process, your heirs have very little access to the assets of your estate. Your executor should have access, but your heirs don’t. Additionally, although different from state to state, the average Probate period is at least one year.
  3. Probate costs money. There are many fees associated with an estate administration with or without Probate. These fees include attorney fees, executor or trustee fees, appraisal fees, and court fees. Additionally, your estate may have to pay taxes and creditors. Only after everyone else is paid can your heirs receive their inheritance.
  4. Probate gives others the opportunity to contest and cause problems. Since Probate is public, creditors and predators can take advantage of your loved ones. There are people who prey upon the heirs of Probated estates. Even those you name in the Will may decide that you acted unfairly and contest the Will. This will cause more time and money to be spent on the Probate process.
  5. 5. Probate can happen more than once. If you have property in more than one state, your estate will have to go through Probate in each state. This means that you will have Probate fees in each state as well. Additionally, some states have inheritance taxes that will be tacked onto the debt your estate owes before the title can be transferred.

There are several ways to avoid Probate:

  • With smaller estates, sometimes Probate is not required.
  • With Payable-on-Death Bank Accounts, a simple form can be signed at the bank.
  • With Transfer-on-Death Registration of Securities, a form can be signed through the broker, bank, or other institution.
  • With Transfer-on-Death Registration for Vehicles, you can sign a form at the Department of Motor Vehicles. Currently, only a few states offer this program.
  • With retirement accounts and life insurance, a form can be signed with the managing firm to name a beneficiary.

Additionally, you can:

  • Give away your assets before you die.
  • Take title to your property jointly with another person.