When a loved one passes away, you may go through a court proceeding called "probate." Probate is the legal process by which a person's final debts are settled and legal title to property is formally passed from the decedent to his or her beneficiaries and heirs.
How the probate process begins
After an individual passes away, the probate process begins in the county of the decedent's legal residence at death. Someone acting on behalf of the decedent comes forward with the decedent's original will. Usually, this person is named in the will as the "executor," and has been chosen by the decedent as the one in charge of finalizing his or her affairs. If the decedent did not have a will, then someone must ask the court to be appointed as administrator to perform the same function as the executor. In most cases, the executor or administrator will be the surviving spouse or an adult child. If there is a dispute over who should serve as administrator, the court can appoint a neutral public administrator. The generic term "personal representative" often is used to refer to an administrator or executor.
The probate process
Regardless of whether the decedent had a will or trust, the basic steps of probate must be completed. Depending on the nature and complexity of the estate, these steps can be very easy or very difficult to complete. Most states have streamlined probate procedures for handling small estates and uncomplicated larger ones. Depending on the state and size of the estate, you may not even be required to go to probate court. But even where court is necessary, if no one is protesting or fighting over the estate, the process is usually fairly smooth. With or without a will, the probate process can be divided into the following four steps.
Step 1 - The probate hearing
If your state requires a court hearing, a date is usually set for the personal representative to appear before a judge, present the will (if there is a will), and ask to be formally appointed as the executor or administrator. After a will's genuineness and validity are established (usually by simple inspection of the document), the court issues an order "admitting the will to probate." Once admitted to probate, the will is a public record as are any of the subsequent filings with the court. These papers are open to inspection by anyone.
After you are officially appointed the personal representative by the probate judge, you will have full authority to deal with the decedent's probate property and accounts. You will be given a certified court document that must be honored by financial institutions and others. In some places, this is called the "letters of administration" or "letters testamentary."
Step 2 - Collection and inventory of assets subject to probate
After being designated as the personal representative, you will need to take an inventory of the estate assets and file this inventory with the court. These include, but are not limited to:
- Money owed to the decedent or the estate. Any money owed to the decedent or estate such as loans, a final paycheck, life insurance payouts or retirement account(s) should be included.
- Bank and stock brokerage accounts. You will also need to list the account numbers and latest balances of any bank and stock brokerage accounts.
- Evaluations of real estate or property. Valuations of real estate or specific valuable collections (such as an antique collection) probably require a professional appraisal. The detail and accuracy necessary is dictated by the circumstances and degree of scrutiny being shown by other interested parties.
Step 3 - Bills, taxes, expenses and creditors
After identifying all of the decedent's assets, you will review his or her final bills, debts, taxes and any claims against him or her as well as the supporting proof. As the personal representative, you must then pay or settle those that are valid and reject those claims that are not valid. The payment of all debts and bills is done with funds from the estate; you are not personally responsible for paying these expenses out-of-pocket, even if estate funds are not available. The surviving spouse and children are generally given an allowance under the law, which varies greatly from state to state, and whether or not there is a will. Generally, this allowance comes "off the top" and is set aside first. As a result, the order of payment of claims against the estate is usually costs/expenses of administration (to include the allowance), funeral expenses, debts and taxes, and all other claims. After paying all of the debts and bills, you must file a report with the court to account for all income received and payments made on behalf of the estate.
Step 4 - Formal transfer of remaining estate property
After all rightful claims, debts and expenses have been paid, the remainder of the property is distributed as the will directs. If there is no will, the administrator will distribute property according to state law. Generally, you have the discretion to distribute the estate in cash or by giving away the property itself, but the will can specify otherwise.
In regards to real estate property, there is often a state-required waiting period that must pass before you can sell or transfer the property. You can begin the process of selling or transferring the property at any time, but the final distribution of property or sale proceeds cannot occur until after the state-specified waiting period (usually, six months). Once the waiting periods have expired and all legitimate bills, debts and taxes have been paid, the remaining estate is available for distribution to heirs or beneficiaries. Only then can you make disbursements of cash, send copies of documents such as deeds and investment statements showing new ownership or transfer physical property to the respective beneficiaries.
After the remaining estate is transferred to heirs and beneficiaries, you will usually complete a final settlement or accounting of the estate. This provides detail on all of the personal representative's dealings on behalf of the estate. Any party who intends to object to any aspect of the probate proceeding should come forward and be heard at this point if not sooner. Once the judge approves the final settlement, your duties as the personal representative are complete, and the estate no longer exists.
Further assistance with the probate process
For more information on the probate process, please contact your local legal assistance attorney. Legal assistance offices can be found through the following service websites: