Probate is a court-supervised method of verifying a last will and testament if the deceased created one. It comprises of locating and assessing the value of the deceased’s assets, paying their last bills and taxes, and allocating the leftovers of the estate to their appropriate beneficiaries.
When Is Probate Required?
Authenticating the Last Will and Testament
Many states mandate the prompt filing of the deceased’s will with the probate court, often simultaneously with a petition to initiate probate. Filing the death certificate, will, and petition together is common and usually straightforward, with many state courts providing forms for this purpose.
If there’s a will, the probate judge will verify its validity, which may involve a court hearing. All beneficiaries listed in the will and heirs (those inheriting by law without a will) must be notified of the hearing.
This hearing allows anyone involved to contest the will’s submission for probate, perhaps claiming it’s invalid or asserting the existence of a more recent will. Challenges to the appointed executor may also arise.
To validate the will, the court relies on witnesses. Many wills include “self-proving affidavits,” where the deceased and witnesses sign an affidavit concurrently with the will. This is often sufficient. Without it, witnesses may need to sign a sworn statement or testify in court about witnessing the deceased sign the will.
Appointing the Executor or a Personal Representative
The judge is going to also appoint an executor, also occasionally known as a personal representative or manager. This person is going to supervise the probate process and settle the estate.
The deceased’s selection for their executor is usually included in the will. The court is then going to then appoint next-of-kin if the deceased did not leave a will behind—usually a living spouse or a grown child. This person is not bound to serve. They can refuse and the court is going to then appoint another person.
The designated executor will get “letters testamentary” from the court—a fancy, legal way of declaring they’ll receive documents enabling them to act and enter into dealings on the estate’s behalf. These documents are sometimes known as “letters of authority” or “letters of administration.”
Posting Bond
The executor may have to post a bond before taking on their duties, although some wills may waive this. The bond serves as insurance, compensating the estate if the executor makes a significant, whether intentional or accidental, error causing financial harm to the estate and beneficiaries.
In several states, beneficiaries can jointly waive the bond, but in others, it’s compulsory, particularly if the executor is different from the one named in the will or resides out of state.
Finding the Deceased’s Assets
The executor’s initial responsibility is to locate and secure all the deceased’s assets to protect them during probate. This process can take time and detective work, as individuals may own unknown assets not mentioned in their wills.
The executor must search for concealed assets, often by examining insurance policies, tax returns, and other documents. In real estate cases, the executor doesn’t move into the property but ensures property taxes, insurance, and mortgage payments are maintained to prevent issues.
The executor can take possession of other assets, such as collectibles or vehicles, placing them in a secure location. They collect statements and documents related to bank accounts, investments, stocks, and bonds.
Establishing Date of Death Values
Date of death values for the deceased’s assets is required to be established and this is usually achieved through account statements and valuations. The court will designate appraisers in many states, but in other states, the executor may pick someone.
A lot of states require the executor to present a written report to the court, listing everything the deceased owned in addition to each asset’s value, including a memorandum as to how that value was reached.
Identifying and the Notification of Creditors
The deceased’s creditors are required to be identified and notified of the passing. A lot of states requires the executor to publish notice of the passing in a local newspaper to notify unknown creditors.
Creditors usually have a limited time-period following them getting the notice to make claims towards the estate for any money owed. The specific time-period will differ by state.
The executor can deny claims when they have reason to think they’re invalid. The creditor may then request the court having a probate judge determine whether the claim needs to be paid.
Paying the Deceased’s Debts
Genuine creditor claims then get paid. The executor can use estate capital to pay all the deceased’s debts and last bills, in addition to those that may have been incurred throughout the final illness.
Preparing and Filing Tax Returns
The executor will file the deceased’s concluding personal income tax returns for the year they passed away. They will establish if the estate is responsible for any estate taxes, and, if it is, file these tax returns additionally. Any taxes owed will also be paid from the estate.
This may occasionally require liquidating assets to raise the capital. Estate taxes are typically owed inside of nine months of the deceased’s date of passing.
Allocating the Estate
Once these steps are completed, the executor can ask the probate court for approval to distribute the remaining assets to the beneficiaries named in the will. This usually requires court approval, granted after the executor submits a detailed account of all financial transactions during probate.
Some states allow beneficiaries to collectively waive this accounting requirement if they agree it’s unnecessary. Otherwise, the executor must list and explain every expense and income received by the estate, often aided by provided forms.
If the will designates inheritance to minors, the executor may need to establish a trust since minors can’t own property. For adult beneficiaries, deeds and other transfer documents must be prepared and filed to fulfill the bequests.
“Intestate” Estates
Intestate estates occur when the deceased didn’t leave a valid will—either they didn’t create one or it was rejected by the probate court due to errors or successful challenges. Without a will, the deceased’s property transfers to their closest relatives according to state law.
Source:
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Garber, J. (2020, June 11). What’s involved in the probate process? Retrieved February 11, 2021, from https://www.thebalance.com/what-is-probate-3505244
