When an individual passes away, all of the property which they own at the time of their passing that is subject to probate administration becomes what is called their probate estate. A probate estate can include:
- Personal property, such as vehicles and furniture;
- Real property, such as a residence or land; as well as
- Other non-physical assets, which may include securities and bank account funds.
Each state has its own judicial process which determines what happens to all of the assets and belongings of a deceased individual. This is known as probate.
How the probate process proceeds is typically determined by whether or not an individual had a valid will in effect at the time at which they passed away. If an individual died intestate, or without a valid will in place at the time of their death, their estate will pass through the probate process.
Many individuals perceive the probate process as an unfavorable one, for numerous reasons. The process may quickly become fairly complex and frustrating.
In addition, the multiple probate hearings required may be time-consuming and, in some cases, confusing. The probate process may also result in an unequal distribution of property or may result in property being distributed to a beneficiary that is different from the one the deceased, or testator, intended.
In certain cases, a portion of the decedent’s estate may escheat, meaning it is claimed by the state. This would prevent any of the survivors from being able to claim that property.
The probate process is usually lengthy and takes several months to complete. This is due to the fact that states have certain requirements regarding providing notice for hearings as well as allowing the estate to remain open for a period of time, often 120 days, to allow creditors to file claims.
The easiest way to avoid the probate process is for an individual to have a valid written will in place prior to their death. Having an individual’s last wishes detailed clearly in writing will likely avoid much of the confusion of probate court.
In addition, there are other ways in which an individual can avoid probate, including an individual giving away the property as a gift prior to their death. An attorney will be able to help an individual formulate an estate plan which will best avoid probate, if that is what they wish to do.
Which Assets do Not Become Part of a Probate Estate?
It is important to be aware that there are certain exceptions to a probate estate and there are particular assets which may be claimed directly by certain survivors. This may apply to assets which have already been transferred during the lifetime of the decedent or if the transfer of title of the property is controlled by a survivorship clause or other legal mechanism.
These types of assets are known as non-probate assets. These assets may bypass the probate court process.
It is important to note that every state has its own rules and laws regarding what qualifies as a non-probate asset. A non-probate asset may include:
- Property held as tenants by the entirety or joint tenants with right of survivorship;
- Bank or brokerage accounts held in joint tenancy with the right of survivorship or with payable on death (POD) or transfer on death (TOD) beneficiaries;
- Property held in a trust; and
- IRA and other retirement accounts.
In general, property which is held jointly with the right of survivorship will automatically transfer to the surviving individual without the need for it to enter into probate. Depending on the laws of an individual’s state, there are certain assets which may be converted into non-probate assets, including:
- Bank and credit union accounts, up to a certain amount;
- Unpaid wages, up to a certain amount;
- Social security benefits, up to a specific amount;
- Some vehicles, depending upon whose name is on the title;
- Some US savings bonds; and
- Certain IRS tax refunds.
The majority of state statutes also list life insurance plans and employment benefit contracts as non-probate assets.
What is the Probate Process?
The probate process, or probating an estate, is typically handled by the local probate court. The probate court will be responsible for overseeing all matters related to probate, including:
- Establishing that a will is valid;
- Appointing an executor to manage the estate or ensuring that an executor was named in the will; and
- Ensuring that the assets are properly distributed to the correct beneficiaries.
Although it varies by state, generally, the probate process proceeds by the following steps:
- If the decedent had a will, then the will typically name the individual who is to become the executor or administrator of the estate. If there is no will or the will does not name an
- individual as become executor, then the probate court will assign an individual to the role;
- The appointed administrator or executor of the estate begins the process of managing the estate. They begin the process by filing documents with the court to schedule and set the date of the probate hearing;
- At the probate hearing, the court will review whether or not the will is valid. Depending on the state and the court’s decision, the procedure will vary from this point forward. It is important to check the state laws and local court rules for more information;
- The executor will next ensure that all debts and/or taxes still owed by the estate are paid off and settled; and
- Any remaining estate assets or items named in the will document will be distributed to the appropriate beneficiaries, or if no will exists, in accordance with state law.
The steps provided above represent the most basic outline of the necessary steps to complete the probate process. These steps can and will vary greatly depending on:
- The laws of the state;
- The local rules for probate procedures; and
- Other variables which relate to the estate itself, such as size and value.
Additionally, not every state requires probate. Many states have laws regarding when it is necessary to probate an individual’s estate.
What do Probate Lawyers do?
Probate lawyers handle all issues related to the probate process, estate planning, and helping individuals ensure their wishes are carried out after they pass away. The main role of probate lawyers is to assist individuals with their estate planning needs and will drafting, so that their estate can avoid the probate process following their death.
The process of estate planning involves detailed and varied work, including identifying and classifying an individual’s different assets as well as assigning them to the corresponding recipients. A probate lawyer can also provide advice regarding tax implications of certain aspects of the estate plan, such as the difference between gifting an asset rather than distributing it under the terms of a will.
It is important to note, however, that probate lawyers do not just draft documents. They also provide legal advice and assist with issues which may arise during the probate process after death.
Probate attorneys may be involved in many types of cases, including contested wills and disputes regarding the distribution of property.
Do I Need a Lawyer for Issues with Probate Estate?
It is essential to have the assistance of a probate lawyer for any issues, questions, or concerns you may have related to probate. The process of probate can be very demanding, especially because it involves all of an individual’s assets.
If you are involved in a probate case, your attorney can answer any questions you may have regarding the process and what you can expect. Having a lawyer assist you during the probate process can make the process much less overwhelming and ensure that your rights are protected and you receive the property to which you are entitled.
If you are interested in creating a will or planning other aspects of your estate, you should contact an estate planning attorney. Your attorney will advise you regarding the laws of your state, assist you with decisions regarding distribution of your assets, and assist you with helping your loved ones avoid the probate process after your passing.