“Although most assets in your estate may pass through the probate process, other assets may not. It often depends on the type of asset or how an asset is titled.”
Probate is a court-supervised process occurring after your death. It takes place in the state where you were a resident at the time of your death and addresses your estate—all of your financial assets, real estate, personal belongings, debts and unpaid taxes. If you have an estate plan, your last will names an executor, the person who takes charge of your estate and settles your affairs, explains the article “Understanding Probate” from Pike County Courier. How exactly does the probate process work?
If your estate is subject to probate, your estate planning attorney files an application for the probate of your last will with the local court. The application, known as a petition, is filed with the probate court, along with the original last will, and requests the appointment of the executor of your estate.
First, the court must rule on the validity of the last will. Does it meet all of the state’s requirements? Was it witnessed properly? If the last will meets the state’s requirements, then the court deems it valid and addresses the application for the executor. That person must also meet the legal requirements of your state. If the court agrees that the person is fit to serve, it approves the application.
The executor plays a very important role in settling your estate. The executor is usually a spouse or a close family member. However, there are situations when naming an attorney or a bank is a better option. The person needs to be completely trustworthy. Your fiduciary will have a legal responsibility to be honest, impartial and put your estate’s well-being above the fiduciary’s own. If they do not have a good grasp of financial matters, the fiduciary must have the common sense to ask for expert help when needed.
Here are some of the tasks the fiduciary must address:
- Finding and gathering your estate’s assets and liabilities
- Inventorying and appraising the assets
- Filing the estate tax return and your last tax return, usually with the assistance of an accountant
- Paying debts, managing creditors and paying taxes
- Distributing the assets
- Providing a detailed report of the estate settlement to the court and any other parties
What is the probate court’s role in this part of the process? It depends upon the state. The probate court is more involved in some states than in others. If the state allows for a less formal process, it’s simpler and faster. If the estate is complicated with multiple properties, significant assets and multiple heirs, probate can take years.
If there is no executor named in your last will, the court will appoint an executor. If you do not have a last will, the court will appoint an administrator to settle your estate following the laws of the state. This is the worst possible scenario, since your assets may be distributed in ways you never wished.
Does all of your estate go through the probate process? With proper estate planning, many assets can be taken out of your probate estate, allowing them to be distributed faster and easier. How assets are titled determines whether they go through probate. Any assets with named beneficiaries pass directly to those beneficiaries and are outside of the estate. That includes life insurance policies and retirement plans with named beneficiaries. It also includes assets titled “jointly with rights of survivorship,” which is how most people own their homes.
Your estate planning attorney will discuss how the probate process works in your state and how to prepare a last will and any needed trusts to distribute your assets as efficiently as possible.
Reference: Pike County Courier (March 4, 2021) “Understanding Probate”
