What is Probate?
Probate is a legal process of validating and acting on a will after someone’s passing. The process may also include the distribution of assets if the person did not have a will. In that case, the court determines how to distribute assets and handle any debts and taxes.
Probate laws vary by state, but most estates go through probate. For someone with an estate plan and will, the court simply validates the will and names the executor. Only if there is no valid will does the court go through a lengthier process to name an administrator and distribute assets.
The process of probate includes several elements related to the deceased’s estate:
- Validating the will
- Inventorying the estate
- Appraising property and other assets
- Paying off any debts of the estate
- Paying taxes owed by the estate
- Distributing assets to the heirs and beneficiaries
How Does Probate with a Will Work?
A person who dies with a valid will is known as a testator. The executor that the testator named for the will begins the probate process. This is often a lawyer or financial advisor. The executor files the will in probate court, which authenticates the will and appoints the executor to act on the will. They notify beneficiaries, distribute assets, pay taxes, and pay debts.
Probate Without a Will
When someone dies without a will in place, they have died intestate. Without a will, the probate court determines how to distribute assets. This is based on the laws in the state. Most states first assign assets to spouses and children of the deceased.
The court appoints an administrator to oversee the process. They act as the executor, distributing assets and paying taxes and debts for the estate. They are also responsible for finding and contacting the inheritors.
What Are the Steps in the Probate Process?
The process of probate varies by state. Every state has its own laws, which can change, for how probate proceeds. In general, the probate follows these steps with variation in details:
- File with probate court
The first step is usually to file the will with probate court and to petition the court to open probate on the estate.
- Authenticate the will
If there is a will, the probate court will hold a hearing to validate it. Anyone with concerns about the will can appear and argue why it may not be valid. The court uses witnesses, often those who have signed affidavits in advance, to validate the will.
- Name an executor
In simple cases with a valid will, the court appoints the executor named by the will. If no one was named, the court appoints someone. The court gives the executor a document that allows them to act on behalf of the estate legally.
- Locate assets and assign value
The executor is responsible for identifying, locating, and protecting assets. This may mean moving assets, such as a valuable vehicle. For property, it means ensuring taxes and insurance are current and paid. The executor must also establish value for assets. In some states, they must submit this as a report to the court.
- Notify creditors
The executor identifies and notifies creditors, which may involve posting an announcement in a local paper. This gives creditors a limited time to make claims. The executor pays those that are valid. They can liquidate estate assets if necessary.
- Prepare and pay taxes
The executor files and pays the personal taxes for the decedent and any taxes applicable to the estate.
- Distribute the estate
Finally, the executor distributes assets to those named in the will or identified by the court as the inheritors. When there is no will, state law dictates distribution, usually to the closest living relatives.
When Do You Not Need Probate?
Smaller, simpler estates may be able to avoid the probate process, depending on state law. Some states allow certain assets, or assets up to a certain value, to pass on to inheritors without probate. For instance, in California, up to $100,000 worth of property can pass without probate.
Many people try to avoid or minimize probate when estate planning because the process can be lengthy for inheritors. A living trust is one way to avoid passing assets through probate. By creating this trust, you hold your assets outside of your estate. Upon your death, they do not go through probate.
Other assets that usually don’t need to go through probate include:
- Retirement accounts for which you have listed a beneficiary
- Life insurance benefits
- Distributions from pension plans
- Property held in joint tenancy
- Payable-on-death bank accounts
- Co-owned savings bonds
Some states allow things like cars or household goods to pass directly to family members without probate. Some require a transfer-on-death form.
Probate can become complicated and lengthy, especially when someone dies without a valid will. If you have lost a close relative and have become responsible for their estate, consider hiring a probate lawyer to help you through the process.