A common scenario in every family is that the grandfather had a property under his name that when he or she dies, the descendants are having a hard time claiming the decease’s estate for various reasons. This is also common in an inherited property without the proper documents. The entire process of claiming or administering a deceased’s property is called a probate process.
To fully understand the probate process, Atty. Renee Hykel Cuddy, Esq. discussed in detail the probate process and some of the simplest steps associated with it. Read the article below to learn more.
The Probate Process: Four Simple Steps
When it comes to administering a decedent’s estate, the process commonly referred to as “probate”—many people fear it is daunting and complicated, but it can actually be as simple as four steps.
What is the Probate Process?
Probate refers to the process whereby certain of decedent’s debts may be settled and legal title to the decedent’s property held in the decedent’s name alone and not otherwise distributed by law is transferred to heirs and beneficiaries. If a decedent had a will, and the decedent had property subject to probate, the probate process begins when the executor, who is nominated by the decedent in the last will, presents the will for probate in a courthouse in the county where the decedent lived, or owned property. If there is no will, someone must ask the court to appoint him or her as administrator of the decedent’s estate. Often, this is the spouse or an adult child of the decedent. Once appointed by the court, the executor or administrator becomes the legal representative of the estate.
The Four Basic Steps to Probate
1. File a petition and give notice to heirs and beneficiaries.
As described above, the probate process begins with the filing of the petition with the probate court to either (1) admit the will to probate and appoint the executor or (2) if there is no will, appoint an administrator of the estate. Generally, notice of the court hearing regarding the petition must be provided to all of the decedent’s heirs and beneficiaries. If an heir or beneficiary objects to the petition, they have the opportunity to do so in court. Also, generally, notice of the hearing is published in a local newspaper. This is to attempt to notify others, such as unknown creditors of the decedent, of the beginning of the proceeding.
2. Following appointment by the court, the personal representative must give notice to all known creditors of the estate and take an inventory of the estate property.
The personal representative then gives written notice to all creditors of the estate based upon state law; any creditor who wishes to make a claim on assets of the estate must do so within a limited period of time (which also varies by state).
An inventory of all of decedent’s probate property, including real property, stocks, bonds, business interests, among other assets, is taken. In some states, a court appointed appraiser values the assets. When necessary, an independent appraiser is hired by the estate to appraise non-cash assets.
3. All estate and funeral expenses, debts and taxes must be paid from the estate.
The personal representative must determine which creditor’s claims are legitimate and pay those and other final bills from the estate. In some instances, the personal representative is permitted to sell estate assets to satisfy the decedent’s obligations. See full post here…
As the author mentioned, she summarized the probate process in four simple steps for her readers to understand. As mentioned, it is complicated, but could also be a simple process. However, what exactly happens during a probate process, a much more detailed step by step process is discussed by Julie Garber in her article at The Balance.
What Happens During the Probate Process?
The steps of probate are similar in most states
Probate is the court-supervised process of authenticating a last will and testament if the deceased made one. It includes locating and determining the value of the decedent’s assets, paying his final bills and taxes, and, finally, distributing the remainder of the estate to his rightful beneficiaries.
The Probate Process—When Is It Required?
Each state has specific laws in place to determine what’s required there to probate an estate. These laws are included in the estate’s “probate codes,” as well as laws for “intestate succession” when a decedent dies without a will.
Probate is still required to pay the decedent’s final bills and distribute his estate when he dies without a will. Although the laws governing probate can vary from state to state, the steps involved are generally very similar regardless of whether a will exists.
Authenticating the Last Will and Testament
Most states have laws in place that require that anyone who is in possession of the deceased’s will must file it with the probate court as soon as is reasonably possible. An application or petition to open probate of the estate is usually done at the same time. Sometimes it’s necessary to file the death certificate as well, along with the will and the petition.
Completing and submitting the petition doesn’t have to be a daunting challenge. Many state courts provide forms for this.
If the decedent left a will, the judge will confirm that it is, in fact, valid. This typically involves a court hearing, and notice of the hearing must be given to all the beneficiaries listed in the decedent’s will as well as his heirs—those who would inherit by operation of law if he had not left a will.
The hearing gives everyone concerned an opportunity to object to the will being admitted for probate—maybe because it’s not drafted properly or because someone is in possession of a more recent will. Someone might also object to the appointment of the executor nominated in the will to handle the estate.
So how does the court decide if a submitted will is the real deal? Many include something called “self-proving affidavits.” The decedent and the witnesses sign the affidavit at the same time the will is signed and witnessed. This is good enough for the court.
Lacking this, however, one or more of the will’s witnesses might be required to sign a sworn statement or testify in court that they watched the decedent sign the will and that the will in question is indeed the one they saw him sign.
Appointing the Executor or a Personal Representative
The judge will appoint an executor as well, also sometimes called a personal representative or administrator. This individual will oversee the probate process and to settle the estate.
Note: The decedent’s choice for an executor is typically included in her will, but the court will appoint next of kin if she didn’t leave a will, typically her surviving spouse or an adult child. This individual isn’t obligated to serve—he can decline and the court will then appoint someone else.
The appointed executor will receive “letters testamentary” from the court—a fancy, legal way of saying he’ll receive documentation that allows him to act and enter into transactions on behalf of the estate. This documentation is sometimes referred to as “letters of authority” or “letters of administration.” Learn more here…
One of the major drawbacks of the probate process is that the entire process is very long and cost a lot of fortune. On average, it takes months, even years to resolve the case. The longer the process takes, the more costly it becomes for the heirs of the property. Is there a way to shorten the process or totally avoid the probate process to claim the inherited property? An article in FindLaw explains in details how to avoid the probate process.
Avoiding the Probate Process
The probate process can be long and costly, taking months and sometimes years to resolve. The longer it takes, the more it will cost, leaving potential heirs with less than the deceased may have intended. For these reasons, most people will try to avoid probate in any way possible.
Transferring assets outside of the probate process can not only save the estate a lot of time and expense, but can also help loved ones avoid years of legal hassle. There are four general ways to pass on your property and avoid the probate system:
- Joint Property Ownership
- Death Beneficiaries
- Revocable Living Trusts
Joint Property Ownership
Jointly owned property with the “right of survivorship” avoids the probate process for one very simple reason: upon death, the deceased joint owner no longer owns the property and it passes to the living joint owner. There are several ways to do this, and the chosen method will depend on what a particular state recognizes.
To create any of these forms of joint ownership with a right of survivorship, states typically require a written document that sets out the joint ownership relationship, the property that is jointly held, and the right of survivorship. Here are the most common forms of joint property with a right of survivorship:
- Joint Tenancy with a Right of Survivorship: as the name suggests, you take property as “joint tenants” and upon the death of a joint tenant, the surviving tenant takes the deceased tenant’s portion.
- Tenancy by the Entirety: this is a form of ownership only available to married couples (and some same-sex couples in a few states). It works in much the same way as a joint tenancy with a right of survivorship, in that effectively upon the death of one spouse, the living spouse takes the deceased spouse’s portion.
- Community Property: in community property states, married couples can hold property as community property with the right of survivorship. It has the same effect upon the death of one spouse as a tenancy by the entirety, where the surviving spouse takes full ownership of the property.
Many types of financial assets and instruments allow you to designate a beneficiary upon your death. Upon your death, these assets become the property of whomever you designate as the beneficiary, are no longer a part of your estate, and thus avoid probate entirely. Here are some of the most common financial assets that allow you to do this:
- Payable on Death (POD) Accounts: as the name suggests, POD accounts are simply accounts with an instruction that upon your death, the account shall be inherited by a beneficiary that you name. They are extremely simple to setup, with most banks simply requiring that you fill out a form naming the beneficiary. The beneficiary simply shows up to the bank with the proper identification and collects the account upon your death.
- Retirement Accounts: an increasingly popular option to avoid probate is the use of retirement accounts, specifically IRA and 401(k) accounts. When you establish these accounts, you will be asked to name a beneficiary of the account upon your death. As a single person, you are free to name whomever you want, but be aware that as a married person, your spouse may inherently have a right to some or all of the money in a retirement account.
- Transfer on Death Registrations: many states allow you to transfer securities (stocks, bonds, brokerage accounts) as well as vehicles without going through probate. Much like POD accounts, you will sign a registration statement that declares who you want your securities or vehicles to pass to upon your death. Learn more here…
The probate process, in general, has its advantages and disadvantages in settling the property of a deceased family member. But as mentioned by the experts, the longer the process would take, the most costly it becomes. Worst case, you might end up spending higher than the value of the property itself. It is important to weigh your options first to avoid any problems down the line.
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