Probate process

Probate Will

The probate process is initiated in the county of the decedent's legal residence at death. Somebody acting on behalf of the decedent must come forward with the decedent's original will. Usually, this person is named in the will as the executor, chosen by the decedent as the one in charge of "wrapping up" his or her affairs. If there is no will, somebody must ask the court to be appointed as administrator, to perform the same function. Most often, this is the surviving spouse or an adult child. If there is a dispute over who should serve as administrator, the court will appoint a neutral public administrator who can be counted on to be fair. This person is paid an hourly fee from estate funds.

Executors and administrators have practically identical legal rights and responsibilities, and may also be referred to as the decedent's personal representative. These terms are used interchangeably in this tutorial. Note that the personal representative's authority only extends to the "probate estate" - defined as property subject to the jurisdiction of the probate court. Assets disposed of outside the probate process are part of the "non-probate estate," and the executor or administrator has no control of these. If a decedent has probate property outside the court's jurisdiction, then that property must be subjected to ancillary probate in the other jurisdiction.

The executor-to-be should file (with or without the help of a lawyer) a Petition for Probate of Will and Appointment of Executor. This is done at the probate court clerk's office. Probate court is a division of the state court system, but it might be referred to by another name. (A certified copy of the death certificate must also be shown to the court. One will need a death certificate for other purposes, so it is a good idea to order about ten copies initially. The coroner or mortuary can assist with this.)

A date is usually set for the person named as executor (or administrator) to appear before a judge, present the will, if any, and ask to be formally appointed. After a will's genuineness and validity are established - by simple inspection of the document - the court issues an order "admitting the will to probate," which the county clerk then records. In some states, expedited procedures may be available (see below).

Once probated, a will is a public record, and so are the subsequent filings with the court. These papers are open to inspection by anyone. Many states' law requires public notice of the probate proceeding by the publication of newspaper ads.

The probate judge officially appoints the executor (or administrator). This appointment confers on the personal representative full authority to deal with the decedent's probate property and accounts. The personal representative is given a certified court document that must be honored by financial institutions and others. In some places, this is called the "Letters of Administration" or "Letters Testamentary."

The Three Basic Steps Of Probate

The steps of probate document tasks that have to be completed on behalf of any person who dies whether he or she has a will, trust, or neither. These chores can be easy or very difficult, depending on the nature of the decedent's property and the reasonableness of the people involved. But much of this business really cannot be avoided even if probate itself is avoided.

Most states have streamlined probate procedures for handling the settlement of small estates, and uncomplicated larger ones. In a few states the procedure for small estates may not even require a trip to probate court. But even where court is necessary, if nobody is protesting or fighting over anything, the process need not be as bad as many people fear.

The probate process can be divided into three steps:

Step 1. Collection, inventory, and appraisal of all assets that are subject to probate.
One of the executor or administrator's first and most important duties after appointment is to take an inventory of estate assets. These assets include money that is owed to the decedent or the estate, e.g. loans, final paycheck, life insurance, or retirement account made payable to the estate. This inventory must be filed with the court.
If the decedent's property consists entirely of bank and stock brokerage accounts, for example, the account numbers and latest balances would be listed. Valuing real estate or an antique car collection, by contrast, would probably require a professional appraisal. The detail and accuracy necessary is dictated by the circumstances and degree of scrutiny being shown by other interested parties.
An estate checking account is usually a good practical idea for paying the decedent's household final bills and estate expenses (e.g., attorney, appraiser). This checking account is useful for combining all the decedent's financial accounts into a single pot. Thought should be given, however, before stocks or bonds are sold. It might be unwise, for example, to convert a good investment into cash in a checking account merely for convenience sake.
Step 2. Paying the bills - taxes, estate expenses, and creditors of the decedent.
The personal representative is never personally responsible for paying these expenses out-of-pocket if estate funds are not available. The surviving spouse and children are generally given an allowance under the law, which varies greatly from state to state, whether or not there is a will. Generally, an allowance comes "off the top," and is set-aside first. Thereafter, the order of payment of claims against the estate is usually:
a) Costs/expenses of Administration
b) Funeral expenses
c) Debts and taxes
d) All other claims
The personal representative reviews the decedent's final bills, debts, and any claims against him or her as well as the supporting proof. The personal representative then pays or settles those that are valid and rejects the rest. He or she may hire an attorney with estate funds for advice, to defend, or negotiate any legal claims. (An example of such a claim might be a motorist demanding compensation for injuries suffered in a car accident caused by the decedent a few months ago).
There are procedures under state law dictating what a rejected claimant or creditor can - and must - do next to keep the claim alive. This might even involve filing a lawsuit against the estate. Anyone who feels the estate owes him or her money is likely to have only a limited time to begin further action. After that period expires, the claim may be barred forever. The certainty of that cut-off is an often overlooked argument in favor of going through probate. Some states allow creditors to wait until after probate proceedings to approach (or sue) those to whom the estate has been distributed. If they have been given notice, however, most creditors will not wait till later even if it is allowed.
Step 3. Formal transfer of estate property according to the will or by the state laws of intestate succession(if there is no will).
When all rightful claims, debts, and expenses have been paid, the remainder of the property is distributed by the executor as the will directs. (At this point, if there is no will, the administrator distributes property according to state law.) The executor generally has the discretion to distribute the estate in cash or in kind (i.e., give away the property itself), but the will can specify otherwise.
The executor may sell or transfer real estate if the will permits it (most do), but only after a legally specified waiting period. The executor usually may sell or transfer the testator's (decedent's) personal property any time but may not begin final distribution of property or sale proceeds until after a waiting period provided by state law (e.g., six months).
When the waiting periods have expired and all legitimate bills, debts, and taxes have been paid, what remains of the estate is available for distribution to heirs or beneficiaries. Only then may the executor make disbursements of cash, send copies of documents such as deeds and investment statements showing new ownership, or transfer physical property to the respective beneficiaries.
The waiting period before property may be distributed, even were it not required by law, is a very practical idea. The personal representative cannot immediately rule out the existence of a forgotten lawful obligation the decedent might have left behind. In fairness, the law requires that all creditors of the decedent have notice and a chance to present their claims. That is also why the executor or administrator publishes a legal notice in the newspaper that the estate is in probate.

A final settlement or accounting is generally required of all the personal representative's dealings on behalf of the estate. Any party who intends to object to any aspect of the probate proceeding should come forward and be heard at this point if not sooner. Once the judge approves the final settlement, the personal representative usually has no further duties, and the estate no longer exists.

Wills and other legal documents often refer to "real" and "personal" property. Real property refers to buildings and land; most people are familiar with that term. But many are unaware that personal property is a specific legal term referring to anything that is not real estate (e.g. cash; a computer; shares of stock; an IRA account).

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