Probate is the process of transferring legal title to property from a person who has died to that person's heirs or beneficiaries. The probate process is supervised by a court and can include paying any taxes or debts that are owing, gathering and accounting for assets, determining the validity of a will, settling disputes over who is to inherit and distributing assets. The legal term for the probate process is testate proceedings.
Probate with a Will
If the deceased has left a valid will, probate may be made easier and shorter. The person named in the will as executor will organize the legalities and handle much of the probate process including accounting for assets, paying debts and distributing the deceased's assets to the people named in the will. If no executor is named in the will, the deceased's relatives can appoint an executor, or the court can appoint one. The executor then submits the will to the probate court in deceased's state, along with a petition asking the court to accept the will as valid. If the will is not disputed and the estate is not complicated, the probate process may take less than a year, depending on state law.
Probate with No Will
If the deceased has not left a will, probate may take much longer and be more complicated. The probate court will first appoint an administrator to act in place of an executor. The administrator will account for the deceased's assets, pay outstanding debts and handle the legalities. However, because there is no will to stipulate who the beneficiaries will be, the court will then distribute any remaining assets according to state law. In most states, the first priority is given to the deceased's spouse, followed by the deceased's children.
Duties of the Executor
The executor is responsible for collecting and inventorying all the deceased's assets, paying all debts, expenses and taxes owed, and distributing the remaining assets according to the terms of the will. This may include valuing assets, taking physical custody of assets and selling assets as necessary to pay off any debts and expenses. The executor must also notify heirs, beneficiaries and creditors. During probate, the deceased's estate becomes a separate tax entity, so the executor will also need to obtain a federal identification number and open a bank account in the name of the estate, from which to pay creditors, as well as filing an estate tax return and a final individual tax return.
Read More: What Are the Duties of the Executor of a Last Will & Testament?
Not every will goes through an extended probate process. In most states, the probate process can be shortened and simplified for small estates. Every state has a different threshold for what qualifies as a small estate, so you will need to check with your state's probate court or an attorney. Probate for larger estates can also be avoided by establishing a living trust, in which you transfer the bulk of your assets into a trust while you are still alive and name a successor trustee to run the trust following your death. The successor trustee then distributes the assets to beneficiaries that you have named in the trust document.
- Stockbyte/Stockbyte/Getty Images