I have had enough interaction with clients lately regarding probate to convince me that there is a lot of confusion regarding probate, what it is, when it is necessary, and how it works. The following is intended to give people a very basic overview of probate, is general in nature, is not jurisdictionally specific, and should not be considered as legal advice or a substitute for consulting an attorney to address your particular legal situation.
WHAT IS PROBATE?
Probate is a formal court supervised process that is utilized with, or without, a written Will, the result of which is that an executor or personal representative is appointed by the court who will administer the estate and distribute assets to the intended beneficiaries. The law varies from state to state and may be complex, so it is best to consult an attorney knowledgable in your particular state's probate statutes. Clients are often concerned about the cost of probate and I encourage them to do their research, but I also caution them when it comes to meeting deadlines and making distributions that failure to proceed in a timely fashion, according to the mandates of the state probate laws, can result in far more time, frustration and costs, than hiring an attorney from the get go.
WHEN IS PROBATE NECESSARY
When There Is A Will
You need to file the decedent's last will and testament with a probate court.Whether that initiates a probate proceeding is another matter. The need for probate depends on the size of the estate at death, state laws, and whether someone is willing to act as executor of the estate. I have had several people erroneously say that they don't need to go through probate because they have a written Will, which is not true.
Generally, the probate process begins after the filing of the last will and testament to:
Establish an estate bank account
Distribute assets
Pay valid debts
File taxes for the deceased
Transfer relevant assets
Clear up any contest of the will
Distribute Assets
During the probate process, the executor acts as a fiduciary. That means the executor must act in the estate's best interests. Gathering, valuing, and distributing property are essential duties. The executor or personal representative cannot take actions to favor themselves at the expense of the beneficiaries.
The executor also initiates the legal transfer of title to that property. If a deceased person owns real estate, a probate proceeding is required to transfer the property. Real property must be transferred from the decedent's name to the surviving owner (if owned as a "tenant in common") or to beneficiaries.
Paying Valid Debts
The executor or heirs of an estate may question the validity of bills submitted for payment. The creditor may have submitted a request for payment after the due date or failed to provide documentation to support the claim. If there's a dispute, the probate court resolves any challenges to a creditor's claim.
Transfer of Assets
Probate is often required to determine the value of the decedent's property. The executor will assess the value of the estate assets and distribute the assets to creditors. Any remaining assets are transferred to the heirs.
Will Contests
Family members can act in unusual, and sometimes usual, ways upon the death of a family member. Issues can arise when family members or heirs are unhappy with the deceased's Will. A beneficiary or expected beneficiary may challenge, or contest, a Will in probate court.
Reasons someone might contest a Will:
A perceived lack of competency when the deceased drafted the will
A belief there was fraud, undue influence, or coercion
Forgery
Problems with the legal document claimed to be the will — lack of witnesses, lack of notary, or other requirements under state law
When There Is No Will
When a person dies without a will, it is said that they have died intestate, meaning there is no written document. The state's probate laws where the decedent lived will determine how their property is distributed upon death.
Estate administration in instances where there is no will is similar to cases where there is a will. The lack of a named executor or personal representative may make the process a little more difficult at the beginning, however the steps getting through probate are essentially the same.
Small Estate
The small estate exemption applies whether or not there is a will. Rather than going through probate, personal property is typically transferred using affidavits. Oregon now refers to this type of estate as a Simple Estate, see my blog on Simple Estates.
Whether probate or some other means of settling the estate of a deceased person applies, is a matter of analyzing the facts and law that apply to a particular situation. It can be confusing as to whether probate must be initiated, or some other means is appropriate for administering an estate. Regardless, in most instances it is best to at least initially consult an attorney to see what is recommended and what options are available. Proceeding without probate, or some other appropriate process, may result in personal liability for someone who engages in estate administration. As previously stated, a little time and money spent with an attorney versed in probate can save a whole lot of time, energy and money in the long run.
Note: As always, the preceding is not intended as legal advice and neither does it constitute the initiation of an attorney/client relationship. For further information regarding your specific legal matter, you should consult a licensed attorney.