What is probate?
Probate is the legal process of distributing a deceased person's assets. Probate refers to both the process of a court determining the validity of a Last Will and Testament (if the deceased created one) and the personal representative distributing the estate.
You may hear someone describe a Will as 'in probate,' which means that a deceased person's Last Will and Testament (and their estate) is somewhere in the probate process.
What is a probate court?
A probate court oversees the distribution of a person's assets after they have died. Their responsibilities include:
- Determining the validity of a person's Will
- Providing legal permission for an executor or administrator to distribute a person's assets
- Upon the application of beneficiaries, providing directions to executors or administrators who aren't fulfilling their duties
- Ensuring a person's assets are equally and fairly distributed, according to intestate succession laws, if they die without a Will
After someone passes away, their executor must provide the deceased's Will to the probate court in the deceased's jurisdiction.
What is a probate attorney?
A probate attorney is a specialized lawyer who advises executors and administrators on how to close the estate of a deceased person and helps prepare probate court forms.
Probate attorneys are not always necessary. As an executor/administrator, you may find that the estate you are closing is simple enough to manage by yourself. Conversely, if you are closing an estate containing complicated assets, such as international real estate, you may find yourself overwhelmed and decide to hire a probate attorney.
How does probate work?
First, a court reviews the deceased person's Will to decide whether it's valid and enforceable. A court may authenticate and accept the Will, allowing the appointed executor to begin closing the estate. Conversely, if a court deems a Will invalid or a deceased person dies without a Will, a court may appoint an administrator who becomes responsible for closing the estate and distributing assets to beneficiaries.
Once a court determines how the assets should be distributed, the executor or administrator can continue the probate process by gathering a deceased person's assets, paying off any outstanding debts, and distributing the estate.
How long does probate take?
The probate process doesn't last for a specific amount of time as there are many factors that can influence the efficiency and length of the process. Closing an estate may take weeks, months, a year, or even longer.
Factors that can affect the duration of probate include:
- Existence of Will: if a person passes away with a valid Will, it can speed up the probate process
- Location of the executor/administrator: if the personal representative lives in the same city as the deceased, it can improve efficiency
- Number of beneficiaries: more beneficiaries to an estate means more paperwork and communication with multiple parties
- Contestation of Will: if someone, whether it's a beneficiary or not, contests a Will, it may hold up the probate process
- Debts: if the deceased passes away with debt, the executor/administrator must ensure they are all paid before distributing the remaining assets
- Taxability of estate: if an estate owes estate taxes, you must involve the IRS
- Amount of assets: if there are many assets, such as many different bank accounts, it may take longer to account for each one
- Type of assets: complex assets, such as joint ownership of a business, are more complicated to distribute to a beneficiary
Most executors and administrators will have different and unique experiences when closing an estate. Patience is required when you're acting as a personal representative, as roadblocks and obstacles are inevitable when closing an estate.
How do I avoid probate?
You can prevent your estate from entering the probate process by:
- Jointly owning assets: your half of the ownership automatically transfers to the other person if you pass away
- Moving assets into a Revocable Living Trust: assets within a Living Trust avoid the probate process
Much like a Last Will, a Revocable Living Trust is an estate planning tool that allows you to designate who will inherit your property when you pass away. However, unlike a Last Will, assets within a Living Trust avoid the probate process.
You can put most assets into a Living Trust, including:
- Real estate, such as a home or rental property
- Financial accounts, such as savings or checking accounts
- Business ownership, whether it be complete or partial ownership of a business
- Investments, such as stocks or mutual funds
- Personal property, such as vehicles
Generally, assets within a trust can reach your beneficiaries much quicker than assets distributed through a Will. Also, adding your assets to a Revocable Living Trust may lower the cost and time it takes to distribute your assets after death.
Those with relatively straightforward estate plans or who don't have many assets may not need a Living Trust. Instead, they may wish to use a Last Will and Testament to distribute their assets and name beneficiaries.
Does probate cost anything?
Depending on your state, as an executor or administrator, you may end up having to pay some fees when navigating the probate process. There may be court, lawyer, appraisal, accounting, or other additional fees that you encounter.
The good news is that you can generally cover these costs with the estate so you don't have to pay out of your own pocket. Some people also leave compensation for their executor to pay them for their time and cover any unexpected costs that they encounter during the probate process.