9 Minute Read
We know that navigating your way through the probate jungle can be intimidating and scary, but with knowledge comes power, right? We’ve mapped out the whole probate process to help you get your bearings.
What Is Probate?
Probate is the legal process that takes place after someone dies. It makes sure property and possessions are given to rightful heirs, and any taxes or debts owed are paid in full. If there’s a written will, the court will first authenticate it and then make sure the directions in the will are carried out.
The probate court judge needs just one person to take the reins in each case (an executor or personal representative.) And they'll be the point person whether or not there’s a clear will in place.
When Is Probate Necessary?
Probate is necessary in all cases, even if there is a clear will in place. Probate basically acts as the supervisory process of distributing assets and titles to those named as heirs in the will.
If there is a will, this whole thing is a lot easier! All a probate court judge has to do is validate that the will is genuine and authorize the executor to carry out the responsibilities outlined in it. Then, they just keep in touch with the executor to see that it’s done.
Get expert money advice to reach your money goals faster!
If there’s no will, the probate process kicks up a notch, and a judge has to do the work the will was supposed to do by first appointing the personal representative. (They serve the same role as the executor does when there is a will.) Then, the court will be involved in valuing the estate, finding creditors and beneficiaries, and determining a fair way to distribute the property to heirs.
Probate is not bad! The process gives direction in a truly difficult situation. After all, someone has died, and if there’s no will, it’s unclear which heirs should get what!
What does not have to go through probate?
With a little preplanning, anyone can make sure items like those listed below avoid the probate process.
- Beneficiary-Named Items – Anything that has a beneficiary already named in the document does not have to go through probate. For example, life insurance can have beneficiaries clearly stated on the deed or the policy.
- Property Held Jointly With Survivor’s Rights – This is just a fancy way of saying if someone else’s name is on the deed, they now own the property. There’s no need for probate court to decide anything.
- POD and TOD Items – Using clear notations, like POD (Payable on Death) or TOD (Transferrable on Death), in the paperwork for vehicles, real estate (not in all states), bank accounts, stocks, and even retirement accounts helps these items bypass probate and go straight to the beneficiary.
- Items Placed in a Living Trust – Everything in a living trust is owned by the trust and not the person who’s died, so these items don’t need to be handled through probate court.
What does have to go through probate?
If these next things are dealt with in a will, everything’s simpler. But if they’re not in the will, the probate court judge has to step in and assist the personal representative with what should be done with them.
- Sole Ownership Property – When property has only the name of the deceased person on the title or deed and is missing the POD or TOD, it would have to go through the probate process to decide ownership.
- Investment Property With a Partner – This happens when people are listed as “tenants in common.” If clear instructions are in a will, there shouldn’t be any setbacks. But if the will has no instructions, the probate process would be needed to determine how the deceased person's portion of the property is to be handled.
- Non-Titled Property – Any small stuff that doesn’t have paperwork saying it’s formally owned is called non-titled property. Furniture, appliances, clothing and general household goods fall into this category. Now, if any were mentioned in the will, no probate court is necessary. But the rest? It’s the probate judge’s decision.
- Inheritance When the Beneficiary Has Died – If a husband dies with a will in place indicating he left everything to his wife, but she died the year before, probate court will have to get involved.
Now that we’ve worked out the players and parts to the probate process, let’s see exactly how it runs.
The Probate Process
The first few steps in the probate process are a bit different in cases where there’s a will and cases where there’s not. But once you get through the first three steps, the process works pretty much the same no matter if there’s an executor or an personal representative. They’ll see to it that each step is taken.
1. Present the Death Certificate to the Court
The executor, lawyer or close relative will need to tell the county court about the death and give them a copy of the death certificate. This will get the process started.
2. Have the Will Validated in Court
Before the will is declared valid, the executor will ask the probate court to examine the will to make sure it was properly signed and dated.
3. Authorize Someone to Direct the Probate Process
This step in the process gives the executor or the personal representative the authority to carry out the legwork of the probate process.
4. Post a Bond
The executor or personal representative may be required to post a probate bond for the estate to ensure everything is distributed correctly according to the will or the directions of the court. The bond is supposed to protect the beneficiaries against any error the executor might make during the probate process, whether on purpose or by accident.
Think of it as an insurance policy to protect the property so the beneficiaries get what’s rightfully theirs. The bond could cost a big chunk of change, but like any of the direct expenses during probate, the estate picks up the tab.
In some states, the bond can be waived by the executor if that person is also an heir. Alternatively, the request for a bond to be waived can be included when the will is being drawn up.
5. Inform Beneficiaries and Creditors
The executor or personal representative will need to find and alert any possible beneficiaries about the death. They’ll also need to communicate with potential creditors about any outstanding debts that need to be settled by the estate. It’ll be easier for the executor, because they’ll have the beneficiaries listed in the will. But both the executor and the personal representative may have to do some legwork to find creditors.
6. Determine the Value of the Property and Other Items
The executor or personal representative will have an assessment is done to determine the value of everything owned at the time of death, possibly through a professional appraiser. Along with the real estate, they’ll need to prepare a complete inventory of all the personal and household items, including their value. Using this information, they’ll work out an estimated value for the entire estate.
7. Pay the Necessary Fees and Debts
Next, the executor or personal representative will pay for the funeral expenses from the estate. Then, they’ll use the estate assets to take care of all taxes, medical expenses and any other unpaid debts. They have to be careful, though, because if it’s not done correctly, creditors could come after the beneficiaries for any outstanding debts!
8. Distribute the Remaining Assets
The executor or personal representative will have to transfer the titles or deeds of the specific real estate or other items into the beneficiaries’ names. All they need to do is follow the directions in the will. If there’s not a will, they need to follow the instructions provided by the probate judge.
How Long Does Probate Take?
The process of probating someone’s assets is different for those who have a will and those who don’t. Maybe it goes without saying again, but having a will helps streamline the probate process for everyone involved.
If there’s a will and no one tries to contest it, the average process takes six to nine months. But if there isn’t have a will, the process could be much longer. Depending on how complex the estate is and how complete the documents are, you could be looking at it taking several years.
During the probate process, the executor or personal representative needs to lock up any unused properties and also keep up with all bills as they come in. Utilities and mortgages must continue to be paid if the assets are going to be available for the beneficiaries down the line.
What’s Included in Probate Costs?
How much the probate process will cost really depends on the estate size, what state you’re in, and how much legal work is needed during the probate process.
Here are a few items that definitely come with a price tag:
- Executor Compensation – Carrying out these duties is not a simple job. The executor or personal representative will be paid from the estate for their services. Usually, each state has a certain percentage (like 5% of the estate value) and some other minimums for compensation.
- Probate Bond (aka Executor Bond or Fiduciary Bond) – Some states require this expense unless the will specifically says not to get it. The bond company normally charges a percentage of the amount of the bond. For instance, if their premium was .5%, a bond of $500,000 would cost $2,500.
- Court Filing Fees – Each state (and county) has its own filing fee amount, so the exact amount will depend on where probate is filed.
- Attorney Fees – Some states say an attorney must handle the probate process, but most states don’t require that a lawyer step in.
- Creditor Notice Fees – It’ll cost a bit to put up notices in local newspapers and other forms of communication to alert beneficiaries and creditors about the death.
Be Prepared for Probate
We know it’s hard to think about, but when you or the person you care about passes away, someone will be involved in the probate process.
Having a will already written and settled before death will help speed up the probate process and provide clarity about what’s intended with the estate. It may even protect the family from unwanted drama in the courtroom during what could be a highly emotional time.
Preparing a last will and testament gives peace of mind for the future and simplifies the probate process. It takes just 20 minutes or less—no attorney needed!