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What Is Probate?

Probate is the legal process of settling someone’s estate after they pass away. Learn more about it and how it works.

Have you ever wondered how a person’s will gets settled when they pass? Often, it must go through a legal process called probate. In a nutshell, this is a way to prove a deceased person’s will and, eventually, carry out their wishes. Typically, this includes distributing belongings to heirs, including family, friends, or other specifically named individuals.

In this article, we’ll offer a detailed explanation of how probate works, as well as an overview of the situations in which it occurs. We’ll also describe ways to avoid having your assets enter into this process.

How Probate Works

As mentioned, probate is a process with the primary aim of legally executing a deceased person’s, or decedent’s, last will and testament. Specifically, it involves validating the will with the court and putting an executor in place.

An executor is a person who ensures the will’s instructions get followed. They’re most often a family member, such as a child or sibling, a trusted friend, or an attorney. After assuming the role, they’ll take inventory of assets, pay outstanding debts and taxes, and distribute property to the proper heirs.

Probate is notorious for being long-lasting and expensive. Here are some factors that can make this reputation a reality:

  • Large or complex estates
  • No will
  • Costly debts and taxes
  • Legal fees
  • Some assets (such as homes or vehicles) can take a while to sell

A Breakdown of the Process

With all the moving parts often intertwined in the probate process, it can be tough to know where to start. Here’s a step-by-step look at what it typically involves:

  1. Death certificate submission. At the start, an attorney or executor sends a copy of the death certificate to the court.
  2. Filing the will. The will gets filed with the court. The court will then analyze its authenticity and ensure it’s valid.
  3. Executor appointment. The court appoints an executor (often someone named in the will) to oversee the process.
  4. Tell beneficiaries and creditors. The executor alerts beneficiaries and creditors that the individual has died, and probate is taking place.
  5. Assess and appraise assets. The executor takes a complete inventory of all property owned by the decedent. This includes real estate, vehicles, bank or retirement accounts, and other miscellaneous possessions. Then, they’ll have to tally up each asset’s value and come up with a total. This will be the estate’s value.
  6. Pay debts and taxes. The executor will be responsible for paying any leftover debts or taxes, using the money in the estate.
  7. Asset distribution. Finally, based on the instructions in the will, the executor distributes the assets to the proper beneficiaries.

It’s important to point out that probate laws vary by state. Therefore, it’s smart to consult with your state government’s policies or an estate attorney to get a detailed handle on what to expect.

When There Isn’t a Will

It’s not uncommon for people to pass away without writing a will or planning an estate. When this happens, the person will have died intestate. Under these circumstances, the court system will have the authority to distribute property and settle the estate, under the state’s intestacy laws.

The biggest drawback of this situation is that it’s entirely possible (and in some cases likely) that assets may not be distributed according to a decedent’s wishes. The court will often create a succession of heirs, often beginning with spouses, children, and then parents or siblings.

Avoiding Probate

Probate isn’t always the most ideal avenue an estate can take after someone’s death. As mentioned, it can take a lot of time and be expensive, costing around $1,500 on average, per the American Bar Association (ABA). There are, however, quite a few ways to avoid it:

Irrevocable and Revocable (Living) Trusts

Setting up an irrevocable or living trust allows you to hold assets with a trustee for a beneficiary to receive upon your passing. The property can dodge probate because it belongs to the trust and is already in someone else’s name when you die.

Joint Ownership of Assets

When you own joint assets with another person, such as a spouse, they can automatically gain full ownership of them upon your death without probate. This is generally the case if you and another individual own property as community property with the right of survivorship, joint tenancy with the right of survivorship, or tenancy by the entirety. Each has its unique differences. If you’re unsure which one you fall under or would like to set up, it’s not a bad idea to contact a lawyer or financial advisor.

Bank and Retirement Accounts

If you have a bank account or retirement account (like a 401(k) or IRA), you can bypass probate by setting it to transfer-on-death (TOD) or be payable-on-death (POD). In this way, any beneficiaries you’ve named will inherit ownership of your account or the funds within it.

Maintaining a Small Estate

Some states allow you to go through easier proceedings if your estate’s total value falls below a certain dollar amount. But what qualifies can vary from state to state. In New York, for instance, the threshold is $50,000. Be sure to check your local laws to see what the minimum size is for an estate to receive simplified probate.

Gifting

Gifting your assets during your lifetime can help you greatly shrink the size of your estate. And, depending on what you give away, this can sometimes be by thousands. If you gift or donate enough, you might be able to trigger the exemption we mentioned in the last section, as long as your state allows it.

How a Professional Can Help

Probate, and estate planning in general, can be stressful and difficult. There are plenty of intricacies, laws, and potential tax implications that can be easy to overlook, especially for the untrained eye.

For this reason, it’s almost always wise to have a legal professional or financial advisor on your side. They can lay out your next steps and clear up how to make the process as easy as possible, whether you’re an executor of a will or are figuring out your estate. If you’d like to find a reputable finance expert, this free tool can help you find up to three advisors in your area.

Frequently Asked Questions

What types of assets go through probate?

Most of a person’s property will go through probate upon their death. Typically, however, this includes any asset or belonging solely owned by a person during their lifetime, including:

  • Real estate
  • Bank accounts
  • Vehicles
  • Possessions

Why would someone contest a will?

Someone may contest a will during probate for a wide variety of reasons, but it’s most often when they think something is amiss with its creation or contents. A family member, for example, may question a will’s validity if they believe that the deceased was under pressure or not in their right mind when they put the document together, often if they were left out of it. Other common reasons may be when someone suspects fraud, forgery, or other administrative issues.

How long does it take to validate a will?

On average, it usually takes around a year to probate a will. But, depending on the state and how big a person’s estate is, it can take more or even less time. If a beneficiary contests the will, the process could drag out. Ultimately, it all comes down to how big an estate is, how many questions (if any) linger, and how long it takes to sell certain assets.

When is probating unnecessary?

There are several scenarios where probate isn’t necessary. This is often the case when an estate’s value falls below a minimum amount, or if beneficiaries have been specifically designated (i.e., in a trust or bank or retirement account). An estate could also sidestep the process if assets were jointly owned or labeled as community property.

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