When a loved one passes away, his or her estate often goes through a
court-managed process called probate or estate administration where the
assets of the deceased are managed and distributed. If your loved-one
owned his or her assets through a well drafted and properly funded
living trust, it is likely that no court-managed administration is
necessary, though the successor trustee needs to administer the
distribution of the deceased's assets. The length of time needed to
complete the probate of an estate depends on the size and complexity of
the estate and the local rules and schedule of the probate court.
Every probate estate is unique, but most involve the following steps:
Filing of a petition with the proper probate court.
Notice to heirs under the Will or to statutory heirs (if no Will exists).
Petition to appoint Executor (in the case of a Will) or Administrator for the estate.
Inventory and appraisal of estate assets by Executor/Administrator.
Payment of estate debt to rightful creditors.
Sale of estate assets.
Payment of estate taxes, if applicable.
Final distribution of assets to heirs.
FREQUENTLY ASKED QUESTIONS
What happens if someone objects to the Will?
An objection to a Will, also known as a “Will contest” is a fairly
common occurrence during the probate proceedings and can be incredibly
costly to litigate.
In order to contest a Will, one has to have legal “standing” to raise
objections. This usually occurs when, for example children are to
receive disproportionate shares under the Will, or when distribution
schemes change from a prior Will to a later Will. In addition to
disputes over the tangible distributions, Will contests can be a quarrel
over the person designated to serve as Executor.
Does probate administer all property of the deceased?
Probate is primarily a process through which title is transferred from
the name of the deceased to the names of the beneficiaries.
Certain types of assets are what is called “non-probate assets” do not go through probate. These include:
Property in which you own title as “joint tenants with right of
survivorship”. Such property passes to the co-owners by operation of
law and do not go through probate.
Retirement accounts such as IRA and 401(k) accounts where there are designated beneficiaries.
Life insurance policies.
Bank accounts with “pay on death” (POD) designations or “in trust for” designations.
Property owned by a living trust. Legal title to such property passes
to successor trustees without having to go through probate.
Do I get paid for serving as an Executor?
Executors are reimbursed for all legitimate out-of-pocket expenses
incurred in the process of management and distribution of the deceased
estate. In addition, you may be entitled to statutory fees, which vary
from location to location and on the size of the probate estate. The
Executor has to fulfill his or her fiduciary duties on behalf of the
estate with the highest degree of integrity and can be held liable for
mismanagement of estate assets in his or her care. It is advised that
the Executor retain an attorney and an accountant to advise and assist
him with his or her duties.
How much does probate cost? How long does it take?
The cost and duration of probate can vary substantially depending on a
number of factors such as the value and complexity of the estate, the
existence of a Will and the location of real property owned by the
estate. Will contests or disputes with alleged creditors over the debts
of the estate can also add significant cost and delay. Common expenses
of an estate include executors fees, attorneys fees, accounting fees,
court fees, appraisal costs, and surety bonds. These typically add up
to 2% to 7% of the total estate value. Most estates are settled though
probate in about 9 to 18 months, assuming there is no litigation