A Sensible Approach To Interpreting Probate
What is Probate?
It is impossible for me to define exactly what Probate will mean to you on a planning, emotional, or financial level. Your experience will depend on the type of estate you have, as well as, what you have done in advance to prepare for your passing. However, since Probate is quite often misunderstood, I offer the following definition as a guide: Probate is the court-supervised legal process whereby a deceased person’s assets are gathered, debts are paid, and any remainder is distributed to beneficiaries either through a Last Will and Testament (Testate) or based on the State Statutory scheme (Intestate). In other words, Probate is used to decide who gets your property when you are gone and to facilitate the transfer of said property.
Is Probate Necessary?
Whether or not Probate is necessary, simply depends. Again, the primary function of probate is to transfer the title of the your property to your heirs and/or beneficiaries once you have passed. If there is no property to transfer, or if you have used methods to avoid Probate such as Payable on Death accounts, Transfer on Death Deeds, or named beneficiaries, there is usually no need for probate. However, since the probate process allows payment of outstanding debts and taxes, sets a deadline for creditors to file claims, and for the distribution of the remainder of the your property to your rightful heirs, probate may still prove advantageous.
Steps of Probate
Even if you die with a Will, it is generally still necessary to go through the Probate process. The first step is typically taken by the person you named as your Personal Representative (also referred to as the “executor” or “executrix). The Personal Representative is appointed as part of Probate and has the responsibility of managing the estate through the proceeding, subject to the established Probate rules and procedures.
Your Personal Representative is allowed to hire an attorney experienced in Probate matters. After an in-depth review of all documents related to the estate, such as assets, debts, and proof of your Will, the attorney will prepare a Petition. The Petition and your Will are then filed with the probate court. It is necessary for your Will to be filed no later than six (6) months after your death.
Next, the attorney handling your estate must notify all people who would have legally been able to receive property had you not had a Will. The attorney must also notify all people that are named as your beneficiaries. Each party then has an opportunity to file a formal objection to admitting your Will to Probate if they believe it to be invalid.
If the Court receives no objections then it will approve the Petition and formally appoint your Personal Representative. The main tasks of your Personal Representative during this time are to determine, gather, and inventory your assets; receive any monies due to you; set up a checking account for your estate; decide who is getting what and in what amounts under your Will; pay funeral bills, taxes, outstanding debts, and valid claims; handle various paperwork, such as discontinuing utilities and charge cards, and notifying Social Security, Civil Service, and Veterans Administration of your death; and to distribute the remaining property in accordance with the instructions provided in your Will.
Personal Representative Bond
Unless you have expressly waived the necessity of bond, a surety bond insuring the Personal Representative’s faithful performance of duties will generally be required by the Probate Court. The amount of the bond your Personal Representative will have to post depends on the value of your assets at the time of your death. The amount of the bond may also be lowered at a later time, if there is consent among the interested parties, your Personal Representative is using restricted accounts, or if there has been a partial distribution of your estate.
How Long Does Probate Take
The amount of time Probate will take depends on the size and complexity of your estate and the difficulty the attorney has in locating the beneficiaries who would take under the Will. In addition, if anyone contests your Will or objects to any actions of your Personal Representative, the process can take much longer.
Accumulated Debt In Probate
A final concern of many that are considering estate planning is their accumulated debt. As above-mentioned, paying your debt is one of the responsibilities of your Personal Representative. However, this does not mean that the Personal Representative will become personally liable on your debt.
As part of Probate, creditors are notified of your death by your Personal Representative or the attorney handling your estate. Once given notice, a creditor must file a claim for the amount owed. If the claim is approved by your Personal Representative, the bill is paid out of the estate. If the claim is rejected, creditors must sue for payment. If there are insufficient funds in your estate, a creditor may only receive a pro rata share of your assets and have to write off the rest of the debt. Your beneficiaries should not have any liability to your creditors as long as you have not acted together in an effort to defraud your creditors.
Hiring a Probate Attorney
All concerns aside, an attorney will be able to assist your Personal Representative through the Probate process. However, an attorney, the Court, your Personal Representative, and your family cannot know your desires if they have not been expressed. While Probate may seem overwhelming, the most important thing you can do to prepare for it is to make your wishes known. Consider now an excellent time to start your estate planning and to make sure your affairs are in order.
Malissa L. Walden, Esq. ©2006