The Ins and Outs of Probate

By Britt Erica Tunick

There is no shortage of estate planning tips for avoiding probate through structures such as trusts, but, in many cases, probate is an unavoidable part of passing certain assets on to beneficiaries.

Probate is the legal process used to validate and process the will of someone who has passed away and to ensure that the specifications of their will are followed. As part of the probate process, lawyers and a judge review a decedent’s will to ensure that it is valid. The process also involves taking an in-depth look at the decedent’s estate to get a big picture of the assets they left behind, any outstanding debts or taxes that need to be paid, and what their final instructions were.

Depending on the size and complexity of an individual’s estate, along with the individual rules of the state where they resided at the time of their death, probate can be a long and costly process.

Though probate laws vary among states, the process is still pretty similar across the country. Following are a few things to keep in mind about probate if you are putting together your own will, or if you have agreed to be the executor of a will for a family member or close friend:

• The executor usually needs to file a will, and usually the death certificate as well, with the probate court where the decedent resided, within 30 days of death,
• Probate is only necessary to transfer property to heirs if the property in question exceeds a certain dollar value. Since these amounts vary among states, it is important to look at the rules within the state where you reside.
• Many retirement accounts, such as individual retirement accounts (IRAs), 401(k) plans, and insurance policies, are not required to go through the probate process in order for the assets within them to be transferred to the named beneficiary.
• The beneficiaries listed in a will are legally entitled to take part in a probate hearing, where they have the opportunity to review the will and to accept it or officially contest it.
• In certain states, once an executor officially assumes the responsibility for executing the wishes of a will, he or she is required to post bond to demonstrate their good faith and intention to protect the interest of the will’s beneficiaries.
• An executor is responsible, typically with the aid of a lawyer or financial advisor, for searching through all of the decedent’s finances to get a good hold on their overall assets and their individual values. In some cases, this can require taking possession of certain assets, such as jewelry, automobiles, or pieces of art.
• An executor is responsible for handling insurance, mortgage payments, property taxes, and any other ongoing expenses until an individual’s estate has been closed out. They are also charged with identifying any outstanding debts, paying off creditors, and filing the decedent’s final income taxes, all of which can be done using assets from the decedent’s estate.

Given the amount of work that can be involved in processing an individual’s will, particularly in the case of larger estates with multiple types of assets, it is important to identify an individual to serve as executor who is responsible, organized, and capable of performing all of the tasks listed above. In cases where there is not an obvious candidate, an alternative to consider is to appoint a professional, such as an attorney, an accountant, or a financial advisor, as the executor of your will. Again, keep in mind that the rules of probate vary among states, so if your estate involves significant assets, it is a good idea to get professional advice regarding any steps you may be able to take to make the process less cumbersome for the executor who will ultimately handle your estate.