Probate is a term which refers to the legal process that is used to distribute an individual’s assets upon their death in accordance with their will. The probate process includes a series of hearings which are presided over by a probate judge and are used to:
- Determine and to prove the validity of the will of the decedent;
- Document the decedent’s property;
- Ensure all of the taxes and debts of the estate are paid; and
- Ensure that all assets are distributed according to the will of the decedent as well as any applicable state laws.
It is important to note that the probate process differs by state. It is also largely influenced by the size of the estate which is being distributed. There are certain states which allow for a more simple probate process if the individual has a smaller estate.
There are also some states which allow the entire probate process to be skipped if the individual’s estate meets certain requirements. Most states, however, have adopted the Uniform Probate Code (“UPC”).
The UPC was established in order to streamline the probate process. Its intent was to make estate and probate administration less expensive and more simple.
Many states which have implemented the UPC have done so in order to standardize the process of estate administration across state lines. Generally, the executor of the estate is responsible for initiating the probate process as well as distributing the assets to the proper beneficiaries.
If the executor does not initiate the probate process, any party who has an interest in the estate is permitted to initiate the probate process instead. This may include someone who may stand to gain from the will, including creditors and beneficiaries.
If there was not an executor named in the will or if the named executor is not available, the probate court will appoint an executor to oversee the probate process. This individual is called the administrator of the estate.
Administrators and executors of estates perform, for the most part, the same tasks, including:
- Identifying and classifying the assets which need to be distributed;
- Ordering the release or transfer of assets, at the appropriate time;
- Reporting any conflicts or issues to the court;
- Handling all debts and taxes; and
- Working with the probate court on various matters.
What Are Some Drawbacks of the Probate Process, and Can Probate be Avoided?
In many cases, individuals try to avoid the probate process because of the costs and time associated with the process. In addition, if the probate court is heavily intervening in the probate process and making decisions regarding the estate, the way the assets and property are distributed may be uneven or unexpected.
An example of this type of situation would occur when a relative believes the distribution was not in accordance with the wishes of the decedent because the probate court follows the state distribution laws instead of the decedent’s personal preferences. These situations may require further litigation in order to resolve the issues, which will also cost more money and take more time from the parties involved.
Probate may be avoided by using other legal instruments, including:
- Living trusts;
- Joint property arrangements; or
- Life insurance policies.
A living trust is a trust which allows an estate owner to transfer legal title of an asset to a trustee. When the individual passes away, the trustee is bound to distribute the trust property according to the terms of the trust.
A joint property arrangement, also called a joint tenancy, is an estate planning tool which allows individuals to legally co-own assets and property, which may include homes, vehicles, and bank accounts. When one owner passes away, the co-owner will receive full ownership of the asset without being required to use the probate process.
A life insurance policy is a non-probate asset. This means that a life insurance policy that names a beneficiary will pay out to that named beneficiary when the policyholder passes away.
Avoiding the probate process saves both money and time. It also allows the beneficiaries more immediate access to the property which they will receive under the will.
In addition, probate proceedings and will are matters of public record. As such, avoiding the probate process keeps an individual’s affairs private.
This means that the public will not have access to the details about how the assets in an estate were distributed. Avoiding the probate process by using a trust allows for a more customized process with greater flexibility because executing a trust is much less formal than creating a will and allows the individual to easily change the trust terms.
Although there are many advantages to avoiding probate, there are also some disadvantages which are important to be aware of. Generally, the cost of creating and funding a trust is slightly higher than that of creating a will.
In the long run, however, creating a trust may save money because the costs of probate are avoided. This is because those probate costs usually come out of the estate.
To completely avoid the probate process requires careful placements of assets into a trust because, if not placed properly, those assets may still have to be distributed using the probate process. In addition, the taxes may be slightly higher for the first few years following an estate owner’s death than if a traditional will was created.
Who Inherits if There is No Will?
If an individual passes away without a will, they are said to have died intestate. The amount of an inheritance as well as the breakdown of an inheritance varies depending on the type of relationship between the individual who is hoping to inherit and the decedent.
The individuals who often inherit include:
- The decedent’s spouse, as long as the couple was legally married;
- Parent, or decedent, to child, if the decedent is not legally married at the time of their death;
- Grandparent to grandchild, if the grandchild of the decedent has survived their parents, or the decedent’s child;
- Child to parent, if the parent who outlived the child who did not have a spouse or children of their own;
- Siblings of the decedent, if they do not have:
- a living spouse;
- grandchildren; or
- parents; and
- Nieces and nephews, if there are no other living immediate family members.
In cases of intestacy, the probate court will go through the possible heirs, or all of the surviving blood relatives, until the court finds a living relative who is now an heir. If the probate court is having a difficult time to find an heir but is aware that an heir exists, they may order an executor to place a notice in the local newspaper in hopes that the surviving relative would come forward.
If no heirs can be located, a decedent’s estate will most likely be turned over to the state in which they resided.
Do I Need an Attorney for Help with Probate Issues?
It is very important to have the help of a probate attorney for any probate issues you may have. As noted above, probate laws vary by state and your attorney can advise you regarding those laws and how they apply to your issue.
Your attorney can also assist you with any questions or concerns you may have regarding the disposition of your own estate. This may include assisting you with taking steps to avoid probate and dispose of your estate according to your wishes upon your death.
If you are an interested party in a will and you encounter an issue with the probate process, your attorney can represent you and help protect your interests in court. Having an attorney will help ensure your wishes and the wishes of your loved ones are carried out as closely as possible.