Probate is the court-supervised process that states use to distribute the deceased personís assets to his beneficiaries after death. If the deceased person had a Will, then as part of probate, the executor must locate and prove the Will. If the deceased person died without a Will, known as dying intestate, the estate must also go through probate and the court will appoint an administrator of the estate. Many states no longer use the terms executor and administrator, but instead refer to such person as the personal representative of the estate.
As part of probate, notice is provided to the deceased personís heirs and creditors. The costs of probate are paid and the debts of the deceased personís estate are paid. The remaining assets of the estate are distributed to the deceased personís heirs or beneficiaries.The advantages of probate are: 1. It provides an orderly administration of the deceased personís assets with a specific time frame by which all creditor claims against the estate must be made; 2. It provides a forum for all interested parties to be heard, and; 3. It allows clear title to be transferred to the heirs or beneficiaries.The disadvantages of probate are: 1. It is costly and can be difficult for the people involved; 2. There are substantial delays in the assets being distributed compared to other alternatives; 3. The deceased personís assets and debts become public record, and; 4. If the decedent owns real estate outside the state of his domicile, a separate probate process may be started in the state where the other real estate is located. See Ancillary Probate Estate.In some circumstances, depending on the laws of the state of the deceased personís domicile, the estate may be eligible for administration without court supervision. This is usually based on the estate being of smaller size and is limited to a certain dollar value of the estate. For example, in some states, if the deceased personís estate is valued at less than 100,000 USD, the heirs or beneficiaries may complete forms and follow procedures set by law to pay creditors and distribute the assets of the estate. This is sometimes referred to as a small estates exemption. The maximum dollar amount for an estate to qualify for a small estates exemption is different from state to state. For more information on how to administer a small estate, visit our Probate of Small Estates page.
Whether you are an executor, an heir to a decedent's estate, a creditor or simply want to understand how probate works, one of the best steps you can take is to invest in a probate guide. A list of guides for executors, personal representatives, and administrators on the estate settlement process is available on our Books About Probate page.
Do You Need An Attorney For Probate?
In most states the executor or administrator is legally permitted to handle the probate proceedings without a lawyer. Check the laws of your state to find out whether it requires an attorney handle the probate court appearances. Probate laws are complex and can be difficult to understand. Unless you are an attorney, you may even have difficulty finding books, manuals or guides written about how to probate an estate in your state. If you attempt to probate an estate without the help of an attorney, you may make costly mistakes that can be difficult or impossible to undo. You will also likely spend a tremendous amount of time on the process, which can interfere with your other responsibilities. If you need to hire a lawyer to probate an estate, discuss the attorney's fees and billing arrangements at length before hiring them. Ask the probate attorney to identify more routine parts of the estate administration process you may be able to handle independently to reduce the overall costs of probate.
Types of Property That Pass Without Probate
Certain types of property do not require probate. Upon the death of the owner, the following types of property transfer directly to the new owner by operation of law:
1. Real estate and personal property when title to property is held in joint tenancy;2. Property held in a living trust;3. Community property with right of survivorship;4. Property that passes by beneficiary designation on an account, policy or benefit program such as life insurance, bank accounts, brokerage accounts, bonds, pensions, annuities, and retirement accounts, provided the ownerís estate is not the named beneficiary; and 5. Property that comes within the small estates exemption and may be transferred by affidavit in accordance with state laws for administering small estates. See also nonprobate transfers.Note, if no beneficiary is named on a bank account, brokerage account, retirement account, or similar type of account, the property will be subject to probate, even though the property could have transferred outside of probate if appropriate beneficiary designations were in place. Contact your bank for information on how to name pay on death beneficiaries on your bank accounts. Most retirement account custodians offer online forms that can be used to name a primary and contingent beneficiary on your IRA or 401k.
How Much Does Probate Cost?
If your executor or administrator hires a lawyer as part of the probate of your estate, the fees and costs can be expensive. The laws of most states contain provisions regarding the amount of fees the attorney can charge to probate an estate. Depending on the laws of your state, the attorney may charge fees from a fixed fee schedule, a percentage of the value of the estate, or an hourly rate.
If the attorney is involved in drafting letters to creditors and beneficiaries, changing title to property, reviewing correspondence, bills, and account statements, communicating with heirs and beneficiaries, reviewing provisions of the will, and handling phone calls regarding the estate, the legal fees can quickly add up. You can make a living trust to transfer assets outside of probate and avoid unnecessary legal fees.
How to Probate an Estate
For more information on how to probate or settle an estate, visit our Estate Administration page.If you are an executor, personal representative or administrator, check out our page with free tips and information for executors.Copyright 2020 Pennyborn.com. ALL RIGHTS RESERVED.
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