Estates / Probate / Estate Administration
Although most people prefer to avoid thinking about the topic, it is inevitable -everyone eventually passes away. Assuming that you have had an estate plan prepared
by a competent attorney who fully understands your wishes, you can take comfort in
knowing that your wishes will be followed and your estate will pass to your loved ones in
the easiest and least expensive way possible. People often know very little about the
process of administering an estate. They are told that they should avoid probate, but
they don’t really know what that means.
In simple terms, probate is the legal process through which a person’s final debts
are paid and any remaining assets are distributed to his or her heirs. This is done
through the probate court. One’s final wishes (assuming they have a will) are made
public. Notice is published in the newspaper and most anyone may look at the
documents on file with the probate court.
When someone passes away, all of the property that he owned at the time of his
death, now called his estate, as a matter of law becomes the property of his heirs. The
distribution of this estate is determined either by the laws of intestacy, a will, or other
non-probate devices.
If a person dies without a legally valid will they are said to have died intestate.
When this happens a default set of distribution laws come into effect, determining what
portion of the estate each legal heir receives. If a person dies with a legally valid will
then they are said to have died testate. In either instance, the court is notified of the
death and several legal mechanisms are started. Depending on the situation, the estate
will then either pass through the formal or informal probate process.
Provided that there is a valid will, it names a personal representative (formerly
known as an Executor), and there is general agreement among the heirs, an estate is
eligible to go through informal probate. Informal probate begins with a requirement of
notice. The person who plans on opening probate, normally the person named as the
personal representative in the will, must give written notice to all heirs and devisees at
least seven days prior to petitioning for probate, and any other person with a right to
appointment as personal representative. Once the seven days have passed, the petition
to open probate is filed. Within thirty days of the filing of the petition, notice must also be
made by publishing in a local newspaper. Once these requirements are met and the
personal representative has been verified and appointed by a magistrate, the estate is
open. Informal probate allows the personal representative to pay creditors of the
deceased with funds from the estate and make distributions according to the wishes of
the will with very little, if any, court intervention.
In the event that one dies intestate, there is no named personal representative,
or a disagreement between the heirs, then an estate will have to go through the formal
probate process. Many of the notice and petitioning requirements are either similar to or
stricter than those involved in an informal probate estate. Any issues with the
administration of a formal probate estate will require the involvement of a judge.
Because of the complexity involved, the services of a probate attorney will be needed.
The cost of probating a formal probate estate is significantly higher than the probating of
an informal estate.
The laws governing probate do provide a way to keep the costs and stress down
a bit. In many instances, once an issue in a formal probate estate has been settled by
litigation it may shift to an informal probate estate, if it is eligible. Alternatively, if an issue
arises in the probating of an informal estate it may shift to a formal probate estate in
order to remedy the issue through litigation and then switch back once the issue is
resolved.
Of course, one can avoid the probating of property if this property is held in a
trust or other will substitute. Many investment and retirement accounts, as well as life
insurance policies have a beneficiary designation that will allow those assets to pass to
heirs outside of probate court. Properly established trusts can be used to avoid the need
to probate one’s property.
Avoiding probate should be one of the main goals of a well-crafted estate plan. A
competent estate planning attorney can ensure that much or all of a person’s assets
pass outside of probate. This means that one’s heirs may receive their inheritance
immediately upon death and without the stress and expense of the probate process. It is
advisable to consult with a competent estate planning attorney in order to determine the
best course of action for your personal estate plan.