A Simple Guide to Probate

Understand probate with this easy to understand step-by-step guide.

State law ultimately determines how probate works, but the general idea is the same, no matter where you live. Probate is a court-supervised process that validates the will of a deceased person. This involves identifying the final assets of the person, paying the last debts, and distributing property. 

When is probate necessary? 

Depending on where you live, probate might not be required to transfer property. Many state laws indicate if a property is valued below a specific amount, it can be passed to heirs without probate proceedings. 

There are a number of financial accounts that do not require probate. These include some 401(k) plans, IRAs, and pensions. Assets in these types of accounts can automatically be transferred to the beneficiary named in the will.

If the deceased had a large amount of property or did not have a will, the probate process becomes more complicated.

How does it work?

Generally, a will names an executor. This person takes charge of overseeing the entire probate process and will usually have 30 days from the date of the will owner’s death to file the right paperwork with a local probate court.

If there is not a will or there is not an executor, the probate court steps in to appoint someone. Usually, this is the next of kin, but if the next of kin declines, the court can appoint someone else.

Validating a will

The executor of the will has to prove it is valid. That means there will be a hearing in court where all the beneficiaries listed have a right to look at the will. To figure out if the will is valid, self-proving affidavits help prove authenticity. Then the will grantor and witnesses sign off, and the will is considered valid. 

Then the executor receives and signs letters that legally bind them to the probate process. 

Identifying assets

When the probate process is underway, the executor has to identify all of the assets and their value. Some states will require executors to provide the court with financial documentation detailing assets and value. 

Contacting creditors, paying off debt

Creditors have a limited time in which they can make claims against the decedent’s estate. These vary by state. However, an executor can challenge the claims and then petition the court to make decisions. 

Filing taxes

Even though a person has died, they are not exempt from filing taxes. An executor has to file and pay off any final taxes using estate funds. 

Property Distribution

After the court confirms that all taxes and debts have been paid, it can move forward with dividing what remains of the estate. If there is no will, this is usually parceled between immediate family members. 

Avoiding Probate

Revocable living trusts can hold almost anything of value – ranging from bank accounts to physical property. These items do not’ have to go through the probate process since they are not technically part of an estate at the time of death.

Another option is to bypass probate with pay-on-death accounts. This is usually just a form issued by your bank that designates a beneficiary. At the time of death, this account transfers directly to the recipient, completely sidestepping the probate process.

Remember that even though probate sounds intimidating, it is really a simple process. The most important thing is to have a will that helps transfer property to the right people.

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