In legal terms, probate is the general administration of your estate — with or without a will. Your will should contain the name of your executor. If it doesn’t, then an administrator will need to carry out the probate process instead. This might result in your assets being used to pay the liabilities for your estate before anything remaining can be distributed to your and distribute your assets to beneficiaries.
When does probate begin?
Probate begins with your death whether or not you have a legal will in place. If you have documentation with instructions on how you want your assets to be distributed, then you’re in an ideal situation.
What is an executor?
Your executor is the person you decided will be responsible for initiating the probate process on your behalf. The will should contain details that the executor will read and abide by while acting in the best interests of your estate.
The executor files the will with the probate court, which initiates the probate process. Probate is a court-supervised proceeding that determines the authenticity of the will. In addition to beginning the probate process, the executor will locate and then oversee the dispersal of your assets.
The executor must pay off any taxes or outstanding debt that you still owe. Creditors usually have a limited amount of time — which is usually approximately one year — to make any claims against your estate for money that you owe them posthumously. At the end of the day, probate judges have the final say as to whether the creditors’ claims are justified.
Furthermore, the executor of your estate is responsible for filing a personal income tax return for your accounts. After the inventory of the estate has been assessed, the value of your assets will be calculated and your debts will be paid off. From there, the executor will seek authorization from the court to distribute what remains in your estate to the beneficiaries named in your will.
What if there wasn’t a will in place before death?
If you pass away prior to writing your will or the will you leave behind is determined to be invalid, your assets will be distributed according to state laws instead of your personal wishes. An administrator will be named to act on your behalf and oversee your estate.
The administrator of your estate will also be tasked with locating or contacting legal heirs of your estate, beginning with any spouses — if applicable — followed by any children and other family members. From there, if need be, the probate court will assess which assets need to be distributed and how to distribute them.
How long does the probate process typically take?
The probate process can take a long time to finalize once it begins. The more complex or contested the estate is, the more time it will require to settle and distribute your assets. Also, the longer the duration of the process, the higher the total cost.
How much does the probate process usually cost?
As you would expect, probating an estate without a will is typically more expensive than doing so with a valid will. However, the time and cost requirements of either situation are still rather high.
Different states have their own laws regarding probate, including decisions as to whether probate is a must-have step of the post-death process. For example, Texas does not require the probate process in situations where the estate amounts to less than $75,000.
Are there ways to bypass probate?
Some assets can bypass probate because the beneficiaries have been initiated through contractual terms. These include pension plans, life insurance proceeds, 401(k) plans, medical savings accounts and individual retirement accounts with designated beneficiaries.
Another popular way to bypass probate is by using a trust. This can yield massive benefits because minimizing the costly expenses associated with the probate process is ideal.
With everything from court fees and payment for professional service hours to administrative costs and more, probate is not a cheap process. But when you have an authenticated trust in place, you can expedite the probate process, making it far faster and more efficient, resulting in lower costs overall.
Since the laws are different in every state, it’s a good idea to consult an attorney to determine whether a probate proceeding is necessary. A lawyer can notify you of the types of reports that must be prepared as well. Thankfully, many states have simplified or streamlined their probate processes over the years.
Many types of property routinely pass outside the probate process. With a properly drafted will, you can eliminate some of the steps that are otherwise required in probate proceedings in which a will does not exist.
