The term probate refers to a legal process in which a person’s assets are distributed upon their death, according to their will. The probate process is a series of hearings that are presided over by a judge in order to:
- Determine and prove the validity of the decedent’s will;
- Document the decedent’s property;
- Ensure all taxes and debts are paid; and
- All assets are distributed according to the decedent’s will as well as any applicable state laws.
The probate process differs from state to state, and is largely influenced by the size of the estate that is being distributed. Some states allow for a more simple probate process if the estate is smaller. Some states also allow the entire process to be skipped if the estate meets certain requirements. However, most states have adopted the Uniform Probate Code (“UPC”).
The UPC was established with the goal of streamlining the probate process, and intends to make estate and probate administration more simple and less expensive. States that have utilized the UPC have done so in order to standardize estate administration across state lines.
In general, the estate executor is responsible for initiating the probate process, and distributing the assets to the beneficiaries. If the executor fails to initiate the probate process, any party that has an interest in the estate may do so instead. This could include a party who could gain from the will, such as a creditor or beneficiary.
If no executor was named in the will, or if the named executor is unavailable, the court will appoint an executor in order to oversee the probate process. This person is referred to as the administrator of the estate. Executors and administrators perform essentially the same tasks, such as:
- Identifying and classifying assets that 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 judge on various matters.
Generally, the probate process is avoided due to costs and time consumption. Additionally, if the court is heavily intervening in the process, and making decisions regarding the estate, distribution of assets and property could be uneven or unexpected. An example of this would be if a relative feels like the distribution was not what the decedent wanted because the court followed state distribution laws, rather than the decedent’s personal preferences. In such cases, further litigation may be required to resolve the issue, which would cost more money and take more time.
Probate may be avoided through the use of:
- Living trusts: These are trusts in which the estate’s owner transfers the legal title of an asset to a trustee. Then the owner dies, the trustee is bound to distribute that property according to the terms of the trust;
- Joint property arrangements: Also known as joint tenancy, these are estate planning tools in which assets such as cars, homes, or bank accounts are legally co-owned. When the owner dies, the co-owner receives full ownership of the asset without being required to go through the probate process; or
- Life insurance policies: These are non-probate assets, this means that life insurance policies which name a beneficiary will payout to that named when the policy holder dies.
Avoiding probate saves time and money, and allows beneficiaries more immediate access to the property they are to receive. Further, wills and probate proceedings are matters of public record. Therefore, avoiding probate keeps affairs private, and the public won’t have access to the details regarding how an estate was distributed. Avoiding probate through utilizing a trust is a much more customized process and has greater flexibility, as executing a trust is much less formal than a will and it is easy to change the terms of a trust.
Although avoiding probate has many advantages, there are some notable disadvantages. In general, it costs slightly more to create and fund a trust than a will. However, creating a trust may save money in the long run by avoiding probate costs, which typically come out of the estate.
Avoiding probate completely requires careful placement of all new assets into the trust because probate may still be required to distribute those assets otherwise. Further, taxes can be slightly higher for the first few years after the estate owner’s death than if a traditional will were utilized.
If a person dies without a will, that is referred to as intestacy. The breakdown of inheritance, as well as the amount of inheritance, varies depending upon the type of relationship between the decedent and the person hoping to inherit. Most commonly this includes:
- The spouse of the decedent, so long as the couple was actually legally married;
- Parent to child, if the decedent does not have a legal spouse at the time of death;
- Grandparent to grandchild, if the decedent’s grandchild has survived their parents (the decedent’s child);
- Child to parent, if the parent outlives their child who had no spouse or children of their own;
- Siblings, if there is no living spouse, children, grandchildren, or parents; and
- Nephews and nieces, if there are no other living immediate family members.
In cases of intestacy, the court will go through the list of heirs, or all surviving blood relatives, until it comes to a living relative who is now the heir. If the court is struggling to find an heir but knows that they exist, they may order the executor to put a notice in the local paper in hopes that the surviving relative comes forward. Should absolutely no heirs be found, the decedent’s estate may likely be turned over to the state in which they lived.
A well qualified and knowledgeable probate attorney can help you understand your state’s laws regarding estate administration and probate proceedings. Additionally, an experienced probate attorney may also assist you with any issues or concerns about the disposition of your estate, and help you form the documents necessary to avoid probate and dispose of your estate upon your death.
If you are in a situation where you are an interested party in a will, and there is an issue with the probate process, an experienced probate attorney may also represent you and your interests in a court of law.