What is a Probate
Probate is a formal Legal process, more specifically, a Judicial process whereby the Will of a person who has died is recognized by a court of law. Executors or Personal representatives are then appointed by the court to distribute the property/assets among the beneficiaries. Everything is done here under the supervision of the Court of Law and this process requires a lot of patience, time, and money.
This involves organizing the money, assets, and possessions of the dead person and after paying any taxes and debts, they are distributed as per the instructions in the Will.
Now the next question which may come to your mind is “How long does the Probate take?”. It depends upon a number of factors. For example, how large and complicated your estate is. Generally, the probate takes around a few months to a few years.
If you have a Will, your Executor will not readily have the authority to administer or distribute your estate among your beneficiaries, your executor will first need to apply in the court to start the probate process. Once the process is completed, then only the Executor will have the right to distribute your estate as per your wishes specified in the Will.
If you don't have a Will, your Probate Process will take much longer than usual.
What is Grant of Probate?
Grant of Probate is a legal document that gives authority to an executor of Will to deal with the deceased’s property.
Probate can be granted only to the executor of the will. In the absence of a Will, the intestacy laws tell us who is entitled to represent the estate, i.e. act as an administrator.
Before applying for a Grant, the executor must collect information about the assets of the deceased and their value at the time of the death of the deceased. Probate ends when all the taxes and debts are paid and the inheritance is passed on.
What is Probate Attorney?
Probate attorneys (also known as Estate Attorneys) help an administrator, executor, or personal representatives of an Estate during the process of Probate.
Probate Attorneys are different from Estate planning attorneys. Estate planning attorneys help a person draft Estate planning documents like Wills, Trusts, Power of Attorneys, etc. while a Probate Attorney helps the executor or representatives of these documents in the process of administration of the estate.
What is a Probate fee?
The major drawback of a Probate is its cost. It differs from State to State and depends upon the following factors:
- State where a person lives
- Size of Estate
- The complexity of Estate
During Probate, fees are paid at different levels.
- Fees to Probate Attorney
- Court Fees (It includes filing fees, certification fees, and notification fees).
- Executor Fees
- Other Fees (It includes appraisal fees, notary fees, storage fees, etc)
What is a Letter of Administration of Probate?
The letter of administration is similar to that of Grant of Probate. When a person dies without a Will, there is no executor or personal representative to the administration of their estate. In this case, the law prescribes a list of people who can apply for Letters of Administration. It is granted to the next of kin of an individual who dies without a valid Will. Following is the list of people (in order of priority) who can apply for Letters of Administration.
- The spouse;
- The children of the deceased;
- The parents;
- Brothers and Sisters;
- Nephews and Nieces;
- Grandparents; and
- Uncles and Aunts.
What is a Probate bond?
A probate bond is a bond required by a Probate court before they appoint an executor/administrator as personal representative of an estate.
Probate bonds work like an insurance policy where financial security is paid by the person being bonded as insurance that they will do what is promised.
The reason behind this probate bond is to make sure that the person appointed as the executor/administrator works in the best interest of the Estate. It also holds them accountable and liable for the acts performed by them during the process of discharging their duties.
The probate bond is designed to protect the estate, its heirs, and creditors.
How Does The Probate Process Work?
Every Will and its probate process is different. It depends upon a number of factors; the instructions specified in the Will, beneficiaries, creditors, etc.
The procedure to be followed by the executor is as follows:
Step 1: The executor of your Will (in case you die without a Will, the court will appoint someone) files papers in the local probate court.
Step 2: Collect the full details of the estate’s assets and debts.
Step 3: Apply for a “Grant of Probate”.
Step 4: Complete an inheritance tax return and pay any tax due.
Step 5: Receive a Grant of probate.
Step 6: Repay the outstanding debts if any.
Step 7: Proceed with the distribution of the estate as per the instructions specified in the Will.
Does all property have to go through probate when a person dies?
No. Most States allow the property to pass free of probate or through a simplified probate procedure for small estates. For example, in California, you can pass up to $100,000 of property without probate.
Creating a Living Trust is another way to avoid probate.
What Is a Small Estate Probate Process?
The probate Process is usually expensive and time-consuming. The small Estate Probate Process is an alternative to the normal probate process. It is available to people who do not hold a large number of assets at the time of their death.
Normal probate procedure takes 1-2 years while this simplified process takes about 1-6 months.
What happens if a Probate is not filed?
Following are the 7 consequences of failing to Probate:
1. Personal Liability against the Personal Representative.
The personal representative of the Executor is responsible to file the Will and then he/she is appointed by the court to distribute the property/assets among the beneficiaries. If failure to file the Will results in loss to the beneficiaries, the personal representative will be personally liable.
2. Disputes among loved ones.
Failing to file for probate will lead to disagreements among family members, and there may be formal legal disputes as well. Heirs and beneficiaries will never be able to know about the assets they are entitled to receive.
3. Titled Assets will not be Transferred.
Titled assets transfer (such as houses, cars, and boats) require the initiation of probate. If probate will not be filed, these assets will remain in the name of the deceased.
4. Creditors' claims against Estate Assets will not be eliminated.
Probate provides finality to creditor claims by the personal representative providing adequate notice and handles all valid claims appropriately. Upon the closure of Probate, creditors cannot claim from the estate or the estate’s beneficiaries. If the estate remains open, creditors can continue to seek payment for debts against the deceased.
5. Heirs and Beneficiaries will never know which Assets they are entitled to receive.
Will provides instructions for how the decedent’s assets are to be distributed among the beneficiaries and heirs. If Will is not filed, there will always be uncertainty among them which may lead to disputes and disagreements also.
6. Taxes Will Not Be Paid.
It is not possible to determine what taxes are owed by the Estate unless the Will is filed in Court. Failure to pay the Estate taxes if any and all other applicable taxes can lead to interest, fines, and other penalties.
The above circumstances may be avoided by making a Living trust or a Last Will as part of your Estate Planning to make it comprehensive as both of them serves different purposes and have their own benefits. Trust can help you to avoid probate and estate taxes and Wills, on the other hand, Wills include the provisions for providing guardians for your minor children, executor for your estate, and your final wishes.
A hassle-free and simple method for making these documents is using an online platform like TrulyWill. TrulyWill offers affordable, comprehensive, state-specific, and legally valid estate plans. You can now make an estate plan in less than 20 mins. A team of experienced attorneys with years of experience in Estate Planning, Probate, and Family Law matters make us a trusted platform to help you create your estate plan.
