PROBATE
Glossary
Administrator: Person appointed by a court to handle an estate where no valid will has been found
Bequest: A disposition of personal property (such as antiques, stocks and bonds or money) made in a will
Devise: A disposition of real estate (such as land, houses or buildings) made in a will
Disposition: giving away or giving up of property, as the disposition of goods in a will.
Executor: Person appointed by a court to administer a will
Intestacy Laws: State laws that govern the disposition of in testate estates
In testate: Not having a valid will
Personal Representative: Executor or administrator
Petition for Probate: A written request by an heir or creditor to begin the probate process
Probate: A court procedure for proving the validity of a will
Testate: The condition of having a valid will
Testator: The maker of the will
Will Substitutes: Property such as joint property, life insurance, and revocable living trusts that are not subject to the probate process
Probate, which means, "proving", is the process of examining a will to verify that it is valid. This includes assuring that it is the true last will of the testator, that it satisfies state requirements, that the testator was competent, and was not the victim of force, fraud, or undue influence.
A will allows a person's property to be distributed in accordance with his or her wishes and because planning steps can be taken to reduce taxes. For people who die in testate (about 50% of all decedents), an administrator is appointed to do the tasks that would otherwise be handled during probate. However, the deceased's assets are passed along to the heirs specified by state law (usually the person's spouse and children; it varies according to family situation and decisions made by the state legislature). Sometimes, if all the heirs agree, the court will allow the administrator to distribute the property based on their agreement rather than the pattern set by the state law.
Probate
The probate process usually begins when the executor named in the will submits the will to the appropriate state court, claiming that it is valid and asking for the court's permission to carry out the terms. Depending on the state, probate works in one of two ways. In some states, it's up to the person offering the will, generally the executor, to prove that the will is valid and should be given effect. In others, the will is probated automatically unless somebody challenges it. Although states have different routines, there are three basic types of probate procedures:
? Formal probate: solemn, supervised, often expensive process of handling either a large estate, an estate which is the subject of a will contest, or one where the appointment of the proposed executor is challenged. ? Informal probate: minimal court supervision of routine cases with no complications and a limited amount of money and property involved. ? Small estate administration: a rapid, informal probate procedure used for small estates. Most of the work is done by reviewing papers submitted to the court rather than examining witnesses. The procedure is faster and less expensive than full- scale probate. Some states simply allow a will to be probated under the administration procedure.
Under either probate or administration, notices must be sent to interested parties who might be entitled to inherit something or challenge the will. Most cases are never challenged. The objections or challenges of the will might include:
? An earlier will was revoked but never replaced It has been hidden or destroyed ? It is a forgery ? It is not properly signed, or otherwise fails to meet the state's requirements ? The testator was incompetent at the time the will was signed ? The testator was forced to sign it, was the victim of fraud, or was unduly influenced to leave money to someone who would not otherwise be entitled to it ? The qualifications of the person who wants to serve as executor or administrator are inadequate.
When there are no challenges to the will, or when it is upheld, the court gives the executor the power to distribute the property. However a prime financial priority is the payment of debts and taxes. After that is accomplished, the remaining property can be distributed to the heirs.
If the decedent was married, his or her spouse has a right of election. This means he or she can challenge the will if it did not provide at least as much as the state-law minimum requirement for assets left to a spouse. The probate court must allow the right of election, and award the statutory amount (typically one-third to one-half of the estate) to the spouse.
Some important assets are exempt from the probate process. For example, if property is jointly owned with the right of survivorship (such as jointly owned real estate or bank accounts), then the property passes automatically to the other owner. Funds may be placed into a revocable, inter vivos (living) trust because these trusts are exempt from probate. So are IRAs, annuities, and life insurance benefits that are payable to a spouse or other named person. Life insurance benefits are also very important because they provide cash to the survivors quickly. It is important to coordinate the will and will substitutes.
What you can do
| » | Know the location of the will. Typical locations are a safe-deposit box, desk or other place where important papers are kept, or the office of the lawyer who drafted the will. Prudent lawyers have safe, fireproof "will vaults" to safeguard these documents. Many states allow testators to deposit their wills with the probate court for safekeeping |
| » | Learn about the probate laws in the state where the decedent lived-and in any other state(s) where he or she owned real estate |
| » | Make sure the executor files the will with the appropriate court, in the appropriate city or county |
| » | Make sure the probate petition is correctly filed; usually, this is a fairly simple procedure |
| » | The personal representative, whether executor or administrator is responsible for doing all the paperwork and distributing the estate's assets. |
The executor's responsibilities are to:
| » | Carry out the terms of the will, once taxes are paid and creditor claims are satisfied |
| » | Close the estate by submitting a sworn statement to the court confirming that the business has been completed. |
| » | Do a final accounting of the estate's assets and debts |
| » | Find out what the decedent owned |
| » | Get a federal tax ID number for the estate; open a bank account for the estate |
| » | Hire an attorney to represent the estate and negotiate the attorney's fee; usually it is not a good idea to hire the attorney who drafted the will |
| » | Prepare and file the necessary state and federal tax returns |
| » | Review bills and creditors' claims; pay the valid ones |
| » | Take steps to protect the property of the estate and keep it secure |
| » | Track down everyone who is entitled to notice |
People often take steps to minimize or avoid probate due to the consumption of time and expense. Contesting a will is time-consuming, expensive, and may create hostility within the family. The probate court itself charges fees based on the size of the estate, so a large estate will require legal fees as well as court fees. It may take months or even years to settle an estate.