Probate is a mandatory process — all property and assets must go through probate before it can be passed on to heirs. This is a long, complicated, public, and expensive process for the family of the deceased, spanning at least several months, if not years; all during an already difficult and mournful part of the family’s lives.
Once a person has died, their property is held and managed by a Personal Representative (PR). There is, of course, another complicated process in order to be named PR:
Hire an attorney to represent you.
- Apply for Letters Testamentary, if there is a will, or Letters of Administration, if there is no will.
- Publish a notice to creditors; the date this notice is published begins a six-month period for creditors to submit claims to the court and to the PR. During this time, any debts owed by the deceased may be collected from the estate—leaving less for heirs to inherit.
- Make an Inventory of all assets and property, and obtain appraisals.
- Obtain a bond (insurance) on property and assets.
- Sell property if money is needed to pay bills.
- Pay debts, claims, taxes, and expenses.
- Prepare a settlement showing income and disbursements.
- Obtain court approval, and distribute assets.
The PR is responsible for distribution of the property, once all transactions are approved by the court. The earliest point at which an estate can be closed and distribution of property can begin is six months and ten days after the notice to creditors is published; usually, however, it takes over a year for the PR to accomplish all necessary tasks and to obtain the court’s approval.
There are also several expenses involved in the probate process, all of which come out of the Estate before it can be passed on to the heirs of the deceased.
First, there are taxes. Before an estate can be closed and assets distributed, state and federal taxes must be paid—including death transfer taxes, and final income taxes, real estate and personal property taxes owed by the decedent.
Then, there are the court costs and attorney’s fees. Every estate pays court costs, the amount of which depending on the size of the estate, and the services the court provides. There are also fees and commissions to be paid to the PR and attorney—the amount again depends on the amount of money and personal property administered in the estate.
Fortunately, there are ways to avoid probate—contact an Estate Planning Attorney, and they can help you determine what the best planning strategy may be for your particular needs.