When someone dies, whether testate (having made a will) or intestate (without a will), their estate may or may not be subject to probate law, depending on their financial situation. For instance, if they had transferred the property into a trust or had assets with beneficiary designations such as life insurance or transfer-on-death accounts, it's possible to avoid probate law in whole or in part.
This guide explains what is probate in law, when it's required, and the steps involved before beneficiaries can receive their inheritance. We also highlight factors that may slow down the process and common estate planning strategies a person can use to avoid probate law.
Probate in law is a legal process that involves distributing a deceased person's property to their beneficiaries under a court's supervision. It's an ordinary inheritance procedure that precedes the execution of a will or distribution of property in the event of intestacy (someone dies without a last will and testament). The process involves the court appointing a personal representative (executor or administrator) who organizes the deceased's assets, pays debts and taxes, and distributes the remainder to the beneficiaries.
However, probate law does not apply to assets placed in a trust, held in accounts with beneficiary designations, or jointly owned. This is because, under such circumstances, the assets automatically pass to the named beneficiaries.
If the estate is considered small, depending on the state probate laws, you can avoid probate. In this case, the assets transfer to the beneficiaries using an affidavit. Probate laws vary from state to state, so what might be considered a small estate in one state might not qualify in another.
Examples of properties affected by probate law include non-titled possessions, tenancy-in-common property, sole ownership property, or any property where the beneficiary passed on before the testator (owner of the will).
While a personal representative can execute the will, the tasks are often overwhelming, especially for an inexperienced individual. It's always advisable to seek the help of a probate lawyer as they're experienced in the relevant probate laws and intricacies of inheritance cases.
A testator can engage a solicitor to assist with will drafting and later execute it once they pass on. During execution, the solicitor assumes the full responsibility of the personal representative as outlined in the state probate law, including reviewing the estate papers, obtaining a grant of probate, organizing the assets, paying debts and taxes, distributing the property, and carrying out any other tasks required by the will.
Heirs do not inherit property immediately after the death of the owner. Instead, probate begins 30 to 90 days after the testator dies, depending on the state probate laws. Upon filing the will, the court validates it and appoints a personal representative to administer the estate.
In most cases, the person named in the will as the executor is the one who files it with the probate court. Once authorized to administer the estate, the executor locates the property, appraises its value, and pays outstanding debts and estate taxes.
After completing the court-assigned tasks, they file for final distribution, and the second and last probate hearing is convened. If the judge is satisfied the executor carried out all the responsibilities, as outlined in the state probate laws, they close the estate and sign the distribution order.
If the deceased had not written a will, the estate becomes intestate. In this case, the court appoints an administrator to distribute the assets to legal heirs. The administrator identifies and contacts the beneficiaries (surviving spouse, children, family members, etc.) who must come forward to claim the property. Otherwise, if they do not claim the inheritance, the estate passes to the state.
Grant of probate is a legal document issued by the court naming the executor, effectively giving them the right to administer a decedent's estate (close accounts, sell property, settle debts, pay taxes, and distribute the remaining assets as instructed by the will).
If the decedent died intestate, the document issued to the administrator is called a grant of administration instead of a grant of probate.
There are multiple steps involved in the probate process from the moment the executor files the will with the probate court until the judge signs the distribution order. In the case of intestacy, the probate process differs slightly at the beginning but is the same from the point the court appoints a personal representative.
The executor (as named in the will) informs the court about the testator's death. The court validates the will and authorizes the executor to administer the estate by issuing a grant of probate. If the decedent died intestate, the court appoints an administrator and gives them a grant of administration, according to the state probate laws.
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The personal representative (executor or administrator) contacts the beneficiaries. If there's a will, the process is much easier as the beneficiaries are listed.
The personal representative identifies the decedent's assets and liabilities, gathers the documentation, and assesses the estate value. They also liquidate assets as necessary, pay outstanding debts and inheritance tax, and submit a tax return.
After settling the liabilities, the personal representative prepares estate accounts and presents them to the court for final approval.
If there are no disputes, the judge issues the distribution order, and the personal representative transfers the assets to the beneficiaries according to the will or as required by probate law in the case of intestacy.
Probate law springs into effect depending on the value of the estate. In the case of a small estate whose value falls below the state's set limits, there's no need to initiate the process.
As probate laws vary from state to state, you should seek guidance from an estate planning attorney to learn whether the decedent's property exceeds the amount that requires probate.
Despite clear guidelines under the probate law, multiple factors can slow the process ranging from conflict-related reasons to ordinary process complexities such as unusual or scattered assets. Below is a list of common factors that prolong the process:
Assets in multiple states
Beneficiaries who live far away
Unusual and difficult-to-value assets
Failing to trace the original will
In-fighting between beneficiaries
Filing tax returns
Probate costs can be substantial, especially if the estate is large. Moreover, the more assets one has, the more time it's likely to take to value them and file tax returns before they transfer to the beneficiaries.
There are various strategies a testator can employ to simplify the process or avoid probate law altogether, including:
Owning assets jointly – Jointly owned assets are not subject to probate law as the full ownership transfers to the co-owner once a person dies.
Placing assets in a living trust – Probate law does not apply to property in a living trust as it transfers to the designated beneficiary upon the death of the testator.
Life insurance, pension plans, IRA – These benefits are not subject to probate law as the funds transfer to the named beneficiary after the policyholder or pensioner dies.
Payable-on-death/ transfer-on-death accounts – Funds held in these accounts are exempted from probate law as they transfer to the beneficiary after the account holder dies.
If you were wondering what is probate in law and how the process works, we hope this guide has answered your questions. Contrary to misconceptions, probate law applies whether one leaves a will or dies intestate. However, there are lawful estate planning strategies a person can use to avoid probate or minimize the size of the estate requiring probate for a quicker process.
Lastly, since a personal representative might not be well-versed with the inheritance procedures and the specific state probate laws, engaging a lawyer right from the will drafting stage or even later during execution (if there wasn't one) helps simplify the process.
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The length of probate varies from case to case based on the size and complexity of the estate and the state probate laws. Usually, if uncontested, the process can take between six months and two years, depending on the state where the decedent lived. Disputes tend to prolong probate and can take even several years to close.
During the first hearing, you should bring all the relevant estate documentation, including the death certificate, will, beneficiaries' contact information, revocable living trust documents, beneficiary designations, tax returns, life insurance policies, contracts, list of assets and debts, etc. However, probate procedures may vary slightly, depending on specific state probate laws.
In probate law, a personal representative is a person given the legal authority to administer a decedent's estate. This could be an executor (named in the will) or administrator (appointed by the court under intestacy).
Probate costs vary depending on several factors, including the size of the estate and the laws of the state where the decedent lived. Generally, the expenses total up to about 3% to 8% of the estate value. These are mainly administrative expenses, such as the cost of posting bonds, publication and legal notices, property appraisal, fees for the personal representative, attorney, tax preparer, and court filing, funeral expenses, and family allowance.
States define small differently; what qualifies as a small estate in one state might not be considered so in another. If you have a small estate as defined by your state law, probate might be unnecessary. In some other states, the law allows a shorter version of probate with simplified court procedures.
If your husband/wife/civil partner dies, the estate can be subject to probate law, depending on the nature of ownership. For jointly owned assets, probate law does not apply as the full ownership passes to you upon their death. But if there are assets under the deceased's sole name, then probate law takes effect.
If the house is in the decedent's sole name or is held as tenants in common, it's subject to probate law. However, if it's jointly owned, the co-owner can sell it without probate upon producing the decedent's death certificate.