What You Need To Know About The Probate Process And Rules

By Rebecca Lake. May 7th 2016

The death of a loved one can be emotionally devastating and oftentimes, family members are unsure of how to proceed in handling the deceased person’s affairs. In cases where the decedent leaves behind few assets, the disposition of their property usually does not require court supervision. However, when there is a sizable estate or multiple parties have an interest in the decedent’s assets, it becomes necessary to initiate the probate process.

What Is Probate?

Simply defined, probate is the legal process that governs the distribution of someone’s assets after his or her death. The probate court is responsible for overseeing the transfer of ownership of an individual’s property and financial holdings to his or her beneficiaries according to the terms established in his or her will or state inheritance rules. In addition to protecting the rights of your beneficiaries, probate also allows the individual’s creditors to recover any outstanding debts owed by the estate.

Each state has different guidelines which specify the rules for initiating and completing of probate. States may either follow the Uniform Probate Code or establish their own probate guidelines. The Uniform Probate Code was established by the National Conference of Commissioners on Uniform State Laws (NCCUSL) as a means of streamlining the probate process. Eighteen states currently follow the Uniform Probate Code (UPC) in its entirety. The remaining states have adopted certain provisions of the UPC.

How Probate Works

The probate process involves four basic steps. First, the executor must initiate probate by submitting the will to the probate court for verification. The executor is the person responsible for overseeing the probate process. You can name someone to serve as executor of your estate when you draft your will or the court may appoint an executor if one is not specified.

Once the probate court reviews and validates the will, the executor is responsible for completing a full inventory of the decedent’s estate. This may include bank accounts, stock holdings, antiques, vehicles, homes, land, commercial property, life insurance policies, retirement accounts, etc. The executor must also determine the fair market value of these assets which may require the assistance of a professional appraiser.

After the executor has determined the value of the decedent’s assets, he or she is responsible for paying any outstanding expenses of the estate. This may include funeral costs, taxes, probate costs and outstanding debts. If any creditors bring claims against the estate, the executor must also determine whether the debt is valid and arrange for its payment if necessary. State law dictates the length of time that a creditor has to file a probate claim.

Finally, the executor is responsible for distributing the decedent’s remaining assets to his or her beneficiaries according to the terms of the will. If there is no will, the decedent is considered to be intestate and a different set of distribution rules apply (For more information on wills and estate planning, see Everything You Need To Know About Wills and Estate Planning.)

Intestacy

If someone dies without a will, it typically falls to the next of kin to initiate the probate process. This person may also petition the court to be named executor or administrator of the decedent’s estate. If no one comes forth to act as administrator, the court will choose an appropriate person to do so. The administrator is responsible for inventorying the decedent’s assets, determining their value and paying all outstanding debts. The administrator is also responsible for distributing the estate to the decedent’s descendants. When there is no will to dictate the disposition of assets, the administrator is bound by law to follow the distribution rules prescribed by the state probate court.

For example, in the state ofOhio, which does not follow the UPC, a surviving spouse would inherit the entire estate if there are no children or if the children are the offspring of both the surviving spouse and the decedent. However, if one or more of the children are not the natural offspring of the surviving spouse, the estate is divided proportionally among them.

In states that follow the Uniform Probate Code, spouses, children, grandchildren, parents, siblings, nieces, nephews, grandparents, aunts, uncles and cousins are all entitled to inherit, with first priority given to the surviving spouse. Adopted children are treated the same as natural children. If the decedent is not survived by any of these relatives, the entire estate will default to the control of the state.

Avoiding Probate

Probate is often a lengthy and expensive process, largely due to the expense associated with hiring an attorney, paying the executor or administrator for their services, paying the appraiser, paying court costs, etc. Depending on the size of the estate, probate can take months or even years to complete. If you’re concerned about the cost or time frame associated with probate, there are several things you can do to help your beneficiaries avoid the process entirely.

First, you can establish a revocable living trust. A trust allows you to transfer ownership of your assets to a trustee, who is responsible for managing your financial affairs during your lifetime. After your death, the trustee is required to distribute your assets according to your specific wishes. Trusts are not subject to probate rules. Second, you can establish a payable-on-death account by instructing your bank or financial institution to transfer your assets to a specific beneficiary upon your death. Third, establishing joint tenancy with right of survivorship for your property allows the surviving owner to inherit your share when you die. Finally, you may choose to gift certain assets prior to your death in order to exclude them from your estate.

Navigating the probate process can be a difficult and stressful experience, particularly if you’re not sure what to expect. An experienced probate attorney can help you plan the distribution of your assets after your death or assist you in handling the probate of a loved one’s estate.

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