In the movies, the process of reading and executing a will, also known as probate, is always highly dramatic. There are tears, screaming, and accusations of betrayal and treachery.
Fortunately, probate in the real world is almost nothing like this. In the vast majority of cases, probate in a three-to-six step process that may be expensive but is rarely so dramatic. You might not even need a probate attorney. But it all starts with preparing the initial documentation.
Are you about to embark on the probate process and don’t know what to expect? Keep reading to learn more.
What is Probate?
When a person dies, they usually leave something behind: it can be money, property, possessions, or even debt. Their survivors then need to deal with their deceased loved one’s possessions.
What’s left behind – or the estate – is usually governed by the deceased’s will. However, you can’t just read the deceased’s will and start handing out money. You need to go through the probate process.
The probate process involves the named executor submitting the will for recognition by the probate court (a legal process) and giving people a chance to contest it if they feel the need.
Probate then continues as the executor completes the wills’ instructions.
The 3 Essential Steps in the Probate Process
For the vast majority of people who earned average incomes during their lifetime and have no inherited wealth, probate is a three-step process. The number of steps increase based on the deceased’s state of residence and the size of their estate.
1. File the Will with the Court
The first step in the probate process is submitting it to the relevant probate court. The steps involved depend on the state you live in, but generally, the executor needs to complete this task as soon as possible.
Your court may also require you to file the death certificate to open probate.
From here, the judge rules on the will to deem it legally valid or not. It will usually include a hearing that allows the named beneficiaries of the will to read it, accept or object it, or contest it.
Ideally, the deceased asked an attorney or another expert for help in creating the will, which usually includes proof that the will is the deceased’s true last will and testament. Self-proving affidavits help prove that the will is valid and is usually enough to open probate.
2. Gathering Assets and Debts
A last will and testament rarely contains an itemized list of every asset and debt in the estate. As a result, the executor must then identify all the relevant assets and debts by combing through the deceased’s accounts.
This process is important because it’s likely that you need to provide a document containing all the estate assets and their value upon the deceased’s date of death.
Dealing with debts is tricky. Generally, the deceased estate still owes the relevant debts to creditors. Though, creditors generally have a statute of limitations to follow before their right to a claim expires. The length of time they have to claim a debt depends on the state.
You’ll also need to determine what the estate owes in taxes. You will likely owe federal estate tax to the IRS, but you need to check whether you live in a state that collects its own estate tax, too.
The debts must be paid before you distribute the estate. Keep in mind that major debt combined with estate taxes can eat into the value of the estate.
Note: the court is likely to ask for detailed documentation of each transaction. Careful records are key if you want to move onto step three.
3. Distribute the Remaining Assets and Property
With all assets and debts gathered and court approval, the executor can begin distributing the property according to the will’s instructions.
Remember, the beneficiaries get what’s left of the estate after debts and taxes – not the total value of the estate before the probate process began.
Do You Need to Hire a Lawyer?
If there’s one thing everyone needs to know about the probate process, it’s that the entire chain of events is highly dependant on how well the deceased prepared for it.
When the deceased has an up-to-date and valid will and they used helpful tools like pay-on-death accounts, it becomes easier to move through the process. Usually, you don’t need a lawyer, and hiring one right away can eat into the value of the estate.
However, you may find you benefit from an attorney’s help as soon as things get sticky, particularly if someone contests the will.
Remember that most attorneys offer a free consultation. If you think you might need one, come up with a list of what questions to ask before your appointment. After the consultation, you might find you’re ready to move forward without hiring a lawyer.
Can You Avoid Probate?
No, if you have a will, then probate is unavoidable. It is more-or-less painless if everyone is prepared and well-organized, but a court needs to approve the process.
However, there are estate planning tools that help you avoid probate entirely. For example, if you choose a revocable living trust instead of a will, then your survivors don’t need to go through the probate process.
A revocable living trust holds anything of value from bank accounts to insurance policies to physical property. Then, when you die, the trust leaves the estate, which means you don’t have an estate. The trustee you named when creating the document manages its assets and distributes property after you die.
Additionally, it is often easier to give away as much as you can before you die. For example, you can give away $15,000 a year to any one person without taxation. If you give both of your children $15,000 a year for five years, then they would receive $60,000 out of your estate early and without taxes. If you gave them $60,000 each in your will, then they’d pay estate tax and would need to go through probate.
The Probate Process is Different for Everyone
If your loved one leaves behind a last will and testament, you must go through the probate process. Usually, it means presenting the will to the court, gathering assets and debts, and then finally dispersing the estate after a judge’s approval.
The complexities of the process depend on the size and type of the estate involved as well as how the deceased prepared for their death.
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