When someone dies with a last will and testament, it passes into the court-supervised process of probate, which is used to authenticate the will and distribute the assets to the beneficiaries. Depending on whether there is a valid will, the will itself, the outstanding debts and the size of the estate, probate can be a long and expensive process.
So, what is probate and how does it work? Find out more about the probate process and the factors that impact it.
What Is Probate and When Is It Necessary?
The probate laws vary from state to state in determining what’s required to probate an estate. These laws generally include the probate codes themselves, as well as the laws in the case of intestate succession, which is when a decedent dies without a valid will in place. In intestate succession, probate is required to handle the decedent’s outstanding debts and distribute the estate to the beneficiaries.
Regardless of the state or whether the decedent had a valid will in place, the process involved is generally the same. How long it takes and how expensive it is are determined by many factors, however.
Authenticating the Will
Many states require the will of a decedent to be filed with the probate court as soon as possible. The application or petition to open the probate of the estate typically occurs at the same time, and it may also be necessary to file the death certificate. This process tends to be quick.
If the decedent has a will, it’s up to the court to decide it’s validity with a court hearing. A notice of the hearing is given to all listed beneficiaries and to the rightful heirs, or the individuals who would stand to inherit all the decedent’s assets if there wasn’t a will.
This gives anyone involved an opportunity to contest the will being submitted for probate, which may occur if it was known to be invalid or if a more recent will was in possession. People may also object to the named executor.
The court decides if a will is valid using “self-proving affidavits,” which are documents signed by the decedent and the witnesses at the same time as the signing of the will. This is usually enough to prove validity.
If this didn’t occur, the will’s witnesses may need to testify in court or sign statements indicating that they saw the decedent sign the will and that it’s the same will that’s in question.
Appointing an Executor
At this time, the court will also appoint an executor of the will, which may also be referred to as the administrator or personal representative. This person will supervise the probate process and will be tasked with settling the estate.
Wills usually name an executor, but if there isn’t a will, the court will appoint the next of kin. This is usually the surviving spouse or an adult child. This person is free to decline, which leads the court to choose another executor.
The appointed executor will also receive a “letters testamentary,” which legally indicates the ability to act and enter into transactions on behalf of the estate. This may also be referred to as “letters of administration” or “letters of authority.”
In some cases, an executor may need to post bond before accepting the letters testamentary and acting on behalf of the estate, although some wills include provisions that remove this step. The bond is in place as an insurance policy to reimburse the estate, and it would go into effect if the executor makes a considerable error, whether accidental or otherwise, that causes financial damage to the estate and beneficiaries.
In some states, the law indicates that the beneficiaries are able to reject the bond requirement, but it’s necessary in other states.
The executor’s first responsibility is locating and acquiring the decedent’s assets to ensure that they’re safe during the probate process. This can be challenging in some cases, especially with decedents who have hidden assets or who decided not to include assets in the will. The executor will need to search for assets with tax returns, insurance policies and other documentation to ensure that all assets are accounted for.
With real estate, the executor needs to be sure that all taxes have been paid, the insurance is up to date and all mortgage payments are made to avoid foreclosure. Beyond that, however, the executor isn’t required to do anything more with property.
As far as physical assets, the executor must take possession of all assets and keep them in a secure location. This can include valuables, vehicles and documents related to bank and investment accounts.
Determining Date of Death Values
Once all the assets are in possession of the executor, the date of death values must be determined. This can be done through appraisals and accounts statements. Once the values are determined, this information is submitted to the court in a detailed, written report.
Notifying Creditors and Paying Taxes
Executors are also tasked with publishing a notice of death in the newspapers and notifying creditors. Creditors only have a limited period of time for claims against the estate for outstanding debts, depending on the state. If the creditors’ claims are valid, the executor will then pay the decedent’s debts from the estate funds.
The executor needs to file the final personal income tax return for the year of death and pay any estate taxes out of the estate. This can sometimes result in assets being liquidated to cover costs.
Once the previous steps are completed and all debts are paid, the executor can petition the court to distribute what remains in the estate to the beneficiaries named in the will. The court will only grant this permission after receiving a full report of the probate process to ensure that all debts are paid.
If some or all of the beneficiaries are minors, the executor will be tasked with setting up a trust to take possession of assets until the beneficiaries are of age. With adult beneficiaries, the executor will need to draw up and file deeds and other transfer documents with county officials to finalize the distribution.
If the decedent died without a valid will, the probate process is generally the same, with one exception. Because there’s no will to name beneficiaries, the court is left to distribute the assets to the heirs according to the state law.
Estate Planning With Tanko Law
The probate process can be long, involved and expensive, but it’s not always necessary. If you want to be sure you’re making the best choice to ensure your assets go to your loved ones, Tanko Law can help. Our experienced estate planning attorneys can guide you through the estate planning process and help you develop a plan for the future so that you can be sure your loved ones are protected. Contact us today to schedule a consultation!