Estate Planning, Probate and Trust Administration
What is Probate?
Probate is a legal process that takes place after someone has passed away. It includes:
1. Proving in a court of law that a deceased person's will is valid (usually a routine matter)
2. Identifying and inventorying the deceased person's
property and having the property appraised
3. Paying debts and taxes
4. Distributing the remaining property as the will or state law,
if there's no will, directs.
Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from the estate property, which would otherwise go to the people who inherit the deceased person's property.
Probate generally works like this: After your death, the person you named in your will as executor or, if you die without a will, the person appointed by a judge will file papers in the local probate court. In court, the executor proves the validity of your will and presents lists of your property, your debts, and who is to inherit what you've left. Then, relatives and creditors are officially notified of your death.
Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will, and on the amount of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property.
For example, if your will makes a number of cash bequests but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.
In most states, immediate family members may ask the court to release short-term support funds while the probate proceedings lumber on. Then, eventually, the court will grant your executor permission to pay your debts and taxes and divide the rest among the people or organizations named in your will. Finally, your property will be transferred to its new owners.
In most circumstances, the executor named in the will takes this job. If there isn't any will, or the will fails to name an executor, the probate court names someone (called an administrator) to handle the process. Most often, the job goes to the closest capable relative or the person who inherits the bulk of the deceased person's assets.
If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative. Normally, families and friends choose this person, and it is not uncommon for several people to share the responsibilities of paying debts, filing a final income tax return and distributing property to the people who are supposed to get it.