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What Is Probate: How It Works & 5 Tips For Avoiding It (Full Guide)

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If you have started any estate planning, you have probably heard of the probate process. Of course, you may have also heard horror stories about going through that process. In some cases, it can take an extremely long time and cost you quite a bit of money. So, what exactly is the probate process and how can you avoid it? Keep reading and we will explain everything that you need to know. You cannot always avoid probate court in every situation, but there are some things that you can do to help.

What Is Probate?

Many people wonder, “What does probate mean?” Probate is the legal process that you must follow to administer the estate of a deceased person. This process allows the probate court to validate and approve the will of the deceased person, and then distribute the assets of that person according to the will. Not everybody has a will, so what happens in that case? Every state has laws that are known as intestate succession laws. These laws describe exactly what happens to a person’s property and assets if they die without a will. The probate process is absolutely necessary in this case so that the court can ensure that the person’s property is distributed according to the laws of that state.

As with any legal process, probate can often drag on for quite some time. There is no specific timeframe for how long the process will take, and each estate is a little different. There are some minimum timeframes for notification to creditors and beneficiaries in most states, so you can expect that process to take at least 6 months in most cases. In very complex cases or estates in which someone contests the will, those might remain open for years before they are finally settled.


Probate Process Steps Explained

So, how does probate work? State law will lay out the exact steps needed for probate proceedings in your state, but they are generally the same in every state at a high level. Most estates will need to go through probate after death. Here are the steps that you need to take as part of the probate process.


Petition The Court

First, a beneficiary or someone who has an interest in the estate needs to petition the court to open the estate. In most cases, this is a surviving spouse or close relative. This is usually a fairly simple motion that can be filed along with supporting evidence. The court will generally require the date of death and a death certificate at this step to prove the death of the person for whom you are requesting an estate be opened. Most people choose to have an attorney help with this process, and you will be required to pay filing fees.


Prove The Will

Many people ask, “How does a will work after death?” Here is where the will comes into play. If the deceased had a last will and testament, it will need to be submitted to the court for validation. This is called proving the will. You basically need to prove that the document being presented was, in fact, the person’s last will and that it was validly executed. Most wills today are self-proving, although you might need to call witnesses into court for older wills that are not self-proving. If the deceased did not have a will, then the estate will follow the intestate laws.


Appoint Executor Or Administrator

The next step is appointing an executor or administrator of the estate. If there is a will, then it will name the executor. This person will be responsible for administering the estate, including paying the outstanding debts and distributing the remaining assets. The executor will be issued legal documents by the court called letters testamentary or letters of administration. These documents will allow the executor to transfer ownership of property of the estate. Even in cases of intestacy, these documents will still be issued. The executor has a fiduciary duty to the beneficiaries to carry out the estate in accordance with the will or intestacy laws.


Notify Creditors And Beneficiaries

All potential creditors and beneficiaries of the estate must be notified that it has been opened. Known creditors and beneficiaries must be notified specifically, but most states require publication in a local newspaper or other periodical to notify unknown parties. The notice must usually remain posted for a certain period of time before the probate procedures can move forward.


Perform Accounting Of Estate

If there is a valid will, then the will can waive this step along with the filing of a bond. Without a will, however, the executor must perform a full accounting of the person’s assets and file a bond with the probate court. This helps to ensure that the executor will fulfill his or her duties appropriately.


Pay Last Expenses

The probate laws require that any outstanding debts of the estate must be paid during this process. The executor will need to obtain letters from the creditors stating that the debts have been paid in full along with an affidavit in some cases. Those will need to be filed with the probate court before the probate assets can be distributed to the heirs. The executor might also need to file an income tax return with the IRS and pay estate taxes or the death tax. In some states, the heirs might also need to pay an inheritance tax.


Distribute Assets

Now it is time to distribute the assets to the heirs. This might include real estate, automobiles, bank accounts, retirement accounts, and other property of your loved one. Generally, life insurance policies are not included as part of the estate. They pass directly to the named beneficiary outside of the probate process. However, the personal representative of the estate will need to distribute all the other assets. When real property is involved, that can add time to the process.


Close Estate

Once all the debts have been paid and all assets distributed, then the estate can be closed. The executor will need to file a petition with the court verifying that those steps have taken place and that there are no outstanding items to be handled. They can ask that the estate be closed, and the probate judge will verify this information before granting the motion and formally closing the estate.


Probate Without A Will

The overall process that is followed when there is no will is essentially the same. However, there are a few minor differences. The administrator will need to be appointed by the probate court since one will not be named in the will. In addition, the property must be distributed according to the intestacy laws in your state. You will likely need an attorney who is familiar with the probate process to assist with this. Remember that a living will is not the same as a last will. A living will is no longer valid upon your death, so you need to make sure that you have both documents.


How Long Does Probate Take?

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The timeline for probate varies based on a few factors. The value of the estate can play a large role in how long it will take. Larger, more complex estates will take longer to administer than a small estate. While you might be able to probate a small estate within a few months, a complex estate could take several years from start to finish.

Another thing that greatly affects the timing of the process is whether or not there are any objections. If a family member comes forward and objects to the will stating that they were mistakenly left out, then that will add time to the process. The estate will not be allowed to move forward until that matter is settled. So, the probate process can really take anywhere from a few months to several years to administer. On average, the process takes about 9 to 12 months in most cases.


5 Tips To Avoid The Probate Process

Since the probate process can take time and can get expensive, most people try to avoid it if at all possible. So, what can you do to avoid the probate process? Here are 5 tips for avoiding it.


Pass Property During Your Lifetime

Instead of waiting until you die, go ahead and start giving property and assets to your heirs during your lifetime. By giving property to your heirs during your lifetime, that property is no longer included in your estate. Just be aware that you might be subject to gift taxes if you give away too much during any given year.

Create A Living Trust

Many people choose a living trust vs a will, although you really need both documents to have a complete estate plan. A living trust allows you to pass the trust assets to the beneficiaries upon your death using the terms of the trust instead of going through probate. Some people also choose to create a charitable remainder trust which continues to provide an income during their lifetime and then goes to charity at a point in the future.

Title Property Jointly

Even real estate does not need to go through probate if titled appropriately. If you own property and want that property passed on to someone else upon your death, then it can be titled with joint tenancy with a right of survivorship. This means that the title automatically passes to the other person upon the death of the first. This is a great and easy way of avoiding probate for your real property. Make sure that you seek legal advice for this suggestion if you live in a community property state.


Title Accounts POD

This is similar to titling property jointly. This most often applies to bank accounts or other financial accounts. If you title your account POD, then the account lists a “Payable On Death” beneficiary. The account automatically transfers ownership upon death.


Leave A Small Estate

If the decedent leaves only a small estate, then most states have special rules that allow for the administration of those quickly and easily. Exactly what constitutes a small estate varies by state, so check your local laws for the specifics in your area. While some form of probate might be required, the more formal probate process can usually be avoided.


The Bottom Line

Probate can be a long and involved process, so it is wise to avoid it when possible. It usually takes about a year, and probate costs usually start somewhere around $1,500 even for smaller estates. Costs for large and complex estates can quickly go into the tens of thousands of dollars. If you want to avoid probate, then follow the tips laid out in this article. It can save you time and money, and your heirs will get their assets more quickly.


Frequently Asked Questions

What is the purpose of probate?

The purpose of probate is to administer the estate of a deceased person. It provides a legal method for the executor or administrator to pay the debts of the estate and distribute all the assets. If there are any questions or challenges about who is supposed to receive certain property, then the probate court will make a ruling on the matter.


Why is it good to avoid probate?

It is good to avoid probate because you can save both time and money. You can avoid the legal fees associated with the process, and in some cases, you might even be able to avoid paying some creditors of the deceased. The heirs will receive their property faster, and they will likely end up with more money due to the savings.


What is the difference between probate and intestate?

Probate is the process through which an estate is administered. Intestate simply means that someone dies without a will. Even when someone dies intestate, you might still need to go through probate if they have assets that need to be distributed.


What are the benefits of probate?

One of the biggest benefits of probate is that it provides a legal way for you to transfer ownership of property from an estate. If you go through probate, then you can be sure that any property you receive is on the up and up. Everything was passed legally, and you can be certain that all the debts and estate taxes have been paid and no creditors will come looking for the property that you may have taken.