Probate court for many people these two words bring up thoughts of estate planning nightmares, prolonged legal costs, and ultimately the possibility that your estate might not go to your heirs. The reason for this is that most people are not aware of what probate is and how it works.
This is important as the odds are that all or part of your estate will need to pass through probate. In fact, most of the probate process is nothing more than paperwork. With that in mind, here is an overview on how probate works, why you need to know it, and how getting a getting a proper probate lawyer can help.
What is Probate?
The simple answer is that probate is a legal process to help distribute the proceeds from someone’s will. While there are instances when an estate does not need to pass through probate, it tends to happen more often than not.
Some of the steps of probate include conducting an inventory of the estate, making sure the property is appraised, ensuring that all debts, taxes, and liens are paid, and finally overseeing the distribution of assets. As you can see, this usually includes a series of paperwork and checks to make sure everything in the estate is ready to pass on to the heirs.
What Triggers Probate?
The process starts by naming an executor in your will, or if no executor is named then asking the court to appoint an ‘administrator’. If you need to petition the court, then you will need to submit an application which will also include a copy of the death certificate and the original will.
Submitting the will is extremely important as this document will be used as the basis for making decisions in probate. As such, you need to make sure that the will meets the standards of the particular state where they will be heard and that it names beneficiaries. This can be a challenge if the estate has properties in multiple states or even countries as this might trigger multiple probate hearings.
What Comes Next?
Once the probate application has been accepted by the court, it will schedule a hearing. This is an opportunity for the interested parties to come forward and either present their objections to the executor or the will. While this can happen, it most cases this is not a worry. However, it points out the reason to have a properly drafted will in place as this is reduce confusion down the road.
If there are no objections, then the hearing is nothing more than a formality. In fact, the executor might not even have to come to the court. Instead, your lawyer will present all the documentation to the court and answer any questions.
Following the first hearing, the court will issue what is commonly known as Letters of Authority or Letters Testamentary. These ‘letters’ will officially name the executor and this will give them the full authority needed to fulfill their duties.
Beyond this, the court might require a bond. This will be used to help protect the estate from any losses caused by the executor. However, this is not always required as it usually depends on the contents or the value of the estate.
Remember, if your estate is spread out over multiple jurisdictions, then you might need to fill probate applications in several locations. While this might complicate the matter of distributing your estate it is something that you will want to review with your lawyer while putting your will together.
Just the Facts
While this doesn’t always come up, proving the validity of a will can be an issue if there are multiple revisions or if the estate is contested. As such, you will want to make sure that your attorney and your executor has everything the need to prove that the will is the authentic. This can include presenting a ‘self-proving affidavit’, which is a notarized statement signed at the time of the will’s drafting, or could be court testimony.
As mentioned, this doesn’t always come up but if your executor can’t prove the validity of your will, then this could lead to delays down the road.
What to do While Waiting for Probate to Finalize?
Now, this can be a trick and one of the things you will want to do is make sure that your estate has instruction, and funds, to take care of your property while the probate court is finalizing its decision.
As such, you will want to open a separate bank account in the name of the estate and make sure it has enough funds to cover relevant costs. In doing so, you will need to have specific instructions on how the funds can be used and what will happen to any balance left in the account by the time your estate clears probate.
Once the probate court has issued its judgment, then the executor’s role is to oversee the transfer of assets in accordance to your wishes. There you have it, an overview of how probate works. As with everything related to death and taxes, make sure you get professional advice from a lawyer who specializes in this area.
Doing so will ensure that your estate is transferred the way you want.
Byron Simpson is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance cent.