What is probate?

Probate is a legal process during which the court oversees the distribution of assets that were left in a Will.

This process can take a matter of months or even a number of years to be completed.

Where does probate occur?

Your Will is probated in the Court of the county and state in which you lived at the time of your death. If you own any property in another state, another probate proceeding will be started in that state and county.

What assets are subject to probate administration?

All assets owned by you in your own name, not in joint tenancy, in trust or with a beneficiary designation, are subject to probate administration when you die.

How is the Will probated?

The following is a VERY simplified outline the general probate process:

1. The original of the Will is deposited with the Court (if any).
2. The filing of the Petition for Probate first needs to be published in a local newspaper, before the Executor named in the Will (if one exists) or Administrator (if there is no Will) is appointed. Executors and Administrators are commonly referred to as Personal Representatives, so from this point forward in our outline, we will refer to Will Executors and Administrators simply as Personal Representatives.
3. The Personal Representative then files a Petition for Probate of the Estate.
4. Generally, for a period of four months from the date of publication of the Petition for Probate, creditors of the Estate can file claims against the Estate. This would include any prior creditors or judgment holders, debts resulting from last illness, funeral expenses, taxing authorities, etc.
5. During this time period, the Personal Representative has to identify and collect assets of the Estate. To do this, the Personal Representative finds all bank and security accounts, debts owed to the Decedent, property owned by the Decedent, etc. The Personal Representative also has to maintain the assets in good condition, and to collect income for the Estate. This consists of maintaining insurance coverage, collecting rent, protecting assets from theft or damage, etc. The Personal Representative may also liquidate assets such as cars, real estate, etc.
6. When the four month Claims period has expired, and when all assets have been collected, real property sold, and assuming no problems have presented themselves such as the Will being contested, the Personal Representative then files a petition with the probate court to allow a distribution of all remaining assets to the beneficiaries/heirs, and files a detailed accounting with the Court setting forth all monies received, monies disbursed, how assets were invested, and the proposed plan for distribution.
7. If the Court approves the plan, the Personal Representative then divides the assets as instructed in the Will, or as required by statute if no Will exists.

The minimum amount of time that the probate process can be completed is approximately six months, but it normally takes longer. Reasons for delays can include Will contests, property cannot be sold, one or more claimants not being notified in the original four-month Claim period so they end up having to be re-noticed, etc. This is among the reasons why it is important to have a good probate attorney, it reduces the chances of complications during the probate process.

Is there any way to avoid probate?

Yes, most states have a summary procedure whereby probate is avoided if the value of your assets is less than a certain value, or if the only heir or beneficiary is your spouse. For example, in California, if your assets amount to less than $100,000, probate can be avoided entirely. Property held in joint tenancy or with a beneficiary designation is not counted toward this $100,000. Also, no more than $10,000 of this $100,000 can be held in real estate. Otherwise, you will need to prepare a Trust in order for your assets to be distributed outside of probate court. It`s in your best interest to consult with an attorney to minimize the chance of legal complications in trying to avoid probate.

What is estate planning?

Estate planning is a process to consider alternatives for, to think through, and to set up legally effective arrangements that would meet your specific wishes if something happens to you or those you care about. Good estate planning is more than just a simple Will. Estate planning also typically minimizes potential taxes and fees, and sets up contingency planning to make sure your wishes regarding health care treatment are followed.

On the financial side, a good estate plan coordinates what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as a 401K plan), and other property in the event you became disabled or if you die.

On the personal side, a good estate plan includes directions to carry out your wishes regarding health care matters, so that if you ever are unable to give the directions yourself, someone you select would do that for you, and know when you would want them to authorize heroic measures and when you would prefer they pull the plug.

What is an estate?

The term estate consists of all the property a person owns or controls, whether in his or her sole name, held in a partnership, in a joint ownership arrangement, or through a trust, and all other monies that would be generated on the person`s death, such as through life insurance. It includes:

• real property and things attached to it (houses, buildings, barns, etc.)
• all personal property (including automobiles, bank accounts, stocks and bonds, mutual funds, stock options, cash, furniture, jewelry, art, collectibles, etc.)
• all businesses and business interests (sole proprietorships, partnerships, corporations, joint ventures, and the goodwill, inventory, tools and equipment, accounts receivable, and other business property, etc.)
• powers of appointment (the right to direct who gets someone else`s property)
• life insurance and annuity contracts, pension benefits, IRAs, 403(b)s, etc.
• all debts and obligations owed to others
• all claims you have against others, such as for the pain and suffering from an auto accident.

When should I start my estate plan?

The only time that you can prepare and implement an estate plan is while you are alive and have legal capacity to enter into a contract. If you are unable to manage your own affairs or suffer from some other disability which affects your legal capacity, your estate plan may be effectively challenged by those who assert that you lacked capacity at the time the documents were created, that you were subjected to fraud, coercion or undue influence during the creation and implementation of your plan.

The best time to start an estate plan is now, while you have the capacity to do so.

Should I have an estate plan?

You should have an estate plan if:

• you are the parent of minor children
• you have property that you care about
• you care about your health care treatment.

If you do not have minor children, do not care about your property, and have no concerns about your health care treatment, then you do not need an estate plan. But if you meet any of these categories above, you should have an estate plan.

If I set up a Living Trust, do I still need a Will?

Yes. Your Will serves as a back-up for assets that you either don`t or are not able to transfer to your Living Trust. Any asset not transferred to the Trust will not pass under the terms of the Trust document. However, in your Will, you can include a clause that names someone to inherit assets that you haven`t left to anyone else.

If you don`t have a Will, any asset that isn`t transferred by your Living Trust will go to your closest relatives in an order determined by state law. These laws may not distribute your assets in the way you would have chosen. The Will is how you can assure that your assets that are not covered under the Trust are distributed according to your wishes.

What are some of the disadvantages of using preprinted will forms?

Preprinted will forms usually do not fulfill the needs of the person writing the will. Also, if part of the form is preprinted, part of it is typed and another part of it is handwritten someone might be able to contest the will claiming part of it had been forged. This is because any change in a will leaves room for doubt as to whether the testator, who is the person writing the will, made the changes or if someone else did. People tend to cross out, delete or add words to these preprinted forms. It can be hard to ascertain who made these changes and why. This problem also puts the will in jeopardy of being contested. Also, these preprinted forms are general forms and do not take into account the specific needs of the estate. Therefore, property may accidentally be left out, inheritors might not be included, and possible tax advantages not taken into account.

What is a Will?

A Will is a written instrument containing directions for how the property of the person making the Will (called the testator) shall be divided on his or her death. State law generally requires that the Will be signed by the testator and by at least two witnesses who have no interest in the property passing under it. The testator must state in the presence of the witnesses that the instrument is his or her Will. He or she must also be competent (not insane, senile or mentally disabled) and not acting under duress or under the controlling influence of any person. A signed instrument purporting to be someone`s Will is not officially recognized until the court having jurisdiction over the instrument declares it to be a valid Will after examining it and the circumstances surrounding its execution. The process by which a court determines whether a Will is valid is known as probate.

What is the difference between a Will and a Trust?

A Will and a Trust serve different purposes. Most people don`t have either one. A Will and a Trust are similar in the effect that both let you designate exactly how you want your assets and other personal property to be distributed to your friends, family and other loved ones after you die. The difference between a Will and a trust is that a Will probates through probate court, but a trust doesn`t. A Trust is administered outside of the probate court after you die.

People prepare a trust to avoid paying these probate taxes. Generally, you would not need to prepare a trust to avoid probating your Will if you net assets amount to less than $675,000. In this case, a Will would serve the same purpose as a trust because the federal tax laws do not tax a person`s asset for the first $675,000 after they die.

What are some guidelines in writing up a will?

The following are some guidelines in writing up a will. The first one is to try to avoid using preprinted forms. The second one is to use the same typewriter and typeface for the whole document. This is because any changes to the document can leave room for a claim that someone other than the testator, who is the person writing the will, wrote the part that has the different typeface. Also, no blank spaces should be left in a will, since that could leave room for someone to write in additional information. The will should be drafted in a clear manner so the testator`s intent is perfectly clear to all that are involved. The language should be simple. All pages of the will should be signed and dated. The will`s witnesses ideally should be younger than the testator and not one of the will`s inheritors. Witnesses should be told that they are witnessing the signing of the will and might be called to testify to that fact. Witnesses, however, are not obligated to read the will or be informed of its contents. Codicils should be used to make minor changes to the will. The full names, addresses and relationships to the testators of all the inheritors should be included in the will.

Who can prepare a Will?

Anyone of sound mind and body can prepare a Will. This generally means someone who is an adult-over the age of eighteen or the age of majority of the state where the peson resides-as well as someone who is not declared to be legally incompetent by a state or federal court. A minor cannot prepare a Will, nor can anyone who has a guardian appointed for them.

What happens if a person dies without a Will?

If a person dies without a Will, he/she will be considered to have died intestate. In this case, property will be distributed by the states laws. Often, the surviving spouse will get half the estate and any children will inherit the other half. If a person dies without a Will and without any trace of any heirs, all property will escheat (be turned over) to the state.

What happens if a person dies with a Will?

In general, after the testator (the person with the Will) dies, the person named in the Will to carry out its terms (an executor or personal representative) files the original Will and other legal papers in a probate court, which is usually located in the county where the testator lived. The executor signs a petition to the probate court describing the circumstances under which the testator executed the Will, naming his or her heirs (the persons who would receive the decedent`s estate), describing the property interests passing under the Will, the legacies received by the beneficiaries and asking the court to admit the Will to probate. Unless they specifically agree to waive notice, each of the heirs must receive formal legal notice that a document purporting to be the Will has been offered for probate. The family members are given an opportunity to appear in court to contest (object to the Will); if they do not contest the Will and the probate judge finds the Will in order, he/she generally admits it to probate and formally appoints the executor. After probate, it is usually difficult for family members to upset a Will. In most states, it is possible for very small estates to be distributed through summary administration or small estates procedures. These procedures are less formal than traditional process of probate.