What Does “Probate” Mean?
Basically, a “probate” is a court proceeding that is needed to transfer assets when someone passes away with assets in their individual name outside of a trust of a value higher than $166,250, with no beneficiary designation, no surviving joint tenant or other disposition (such as pay on death).
A probate may be needed whether or not somebody has a will. There has been a lot of negative press about probate in the past; however, the process can be relatively pain-free.
How Do You Start A Probate?
The first step to start a probate is to file a Petition for Probate with the court in the County where the decedent lived (or where the decedent owned real property) to appoint someone as the personal representative.
Mailed notice of the hearing on the Petition for Probate must be provided to relatives and to those who are named in the will, if there is one. A notice must also be published in a local paper putting “the world” on notice that the estate is going to be probated.
If there are no objections, and all procedural rules are followed, a personal representative will be appointed by the court. The personal representative basically stands in the shoes of the decedent to collect the assets for eventual distribution to the heirs or beneficiaries. The personal representative nominated in a will is known as an “executor,” and if there is no will, as the personal representative is known as an “administrator.”
The personal representative will marshal the assets and file an inventory with the court that describes the assets and their value.
Once the assets are marshaled, and reported to the court on an inventory, the personal representative needs to handle other procedural duties, such as notifying certain authorities of the death (including the Social Security Administration, the IRS and the Franchise Tax Board), paying the decedent’s debts, preparing the last tax return for the decedent and preserving the assets of the estate. Sometimes it is necessary to sell assets during the probate, which may require court confirmation.
Another requirement for a personal representative is to give notice to the decedent’s creditors and invite them to file claims for decedent’s debts. Once the time has passed for creditors to file a claim, and all debts and taxes have been paid, the personal representative can prepare a final petition for distribution. Normally, that petition will include a full accounting of all of the assets, receipts and expenses of the estate. The final petition is set for a hearing, and once the petition is approved, the personal representative can distribute the assets of the estate to those entitled.
How Much Does A Probate Cost?
The fees for standard services of the personal representative and their attorney are set by statute and are based on a percentage of the value of the assets under management in the probate estate. The personal representative and the attorney are both entitled to the same statutory fee. If there are extraordinary services provided, which can include (but are not limited to) handling a tax audit, selling real estate, or engaging in any kind of litigation over the estate assets, the personal representative and attorney can request “extraordinary fees”, which must be approved by the court. No fees can be paid to the attorney or the personal representative without a court order and normally not until the end of the administration.
There are some out of pocket costs that need to be paid as part of a probate proceeding, including court filing fees, the fee for the probate referee who will appraise the assets, the cost of publication of the notice in the newspaper and certified copies of orders. The personal representative can seek reimbursement of these costs in the final petition to distribute the estate.
The fees and costs involved in a probate are not significantly different than those incurred in a trust administration, which is handled outside the courts.
One of the benefits of having a probate is that creditors are limited in their time to file claims. Another benefit is that the court will release the personal representative of liability at the end of the administration.
If the decedent has a will, the assets will be distributed as set forth in that will. If there is no will, the assets will be distributed according to the laws of intestate succession as set forth in the Probate Code. The intestate succession rules provide that the assets go to one’s relatives in descending order of closeness of relation. Despite popular myth, the assets do not “go to the state” if there is no will. And, there is no increase in the amount of taxes that may be due if there is no will.
How Long Does A Probate Case Last?
The probate administration process can take anywhere between approximately six months to sometimes up to two years to complete, depending on a variety of circumstances. The length of time of the probate can be affected by creditor claims, issues with selling or collecting assets, fights among beneficiaries, or other matters that can be out of the control of the personal representative.
If you have been named as an executor of a will or if there is no will and you are the person with priority to act as an administrator of an estate, it is important for you to contact an attorney with experience in probate administration to ensure that you handle the administration properly. There can be many pitfalls and as administrator you are subject to personal liability. It is always best to consult with an expert in this area to ensure a smooth process.
For more information contact Hughes & Pizzuto – https://hplawsd.com/contact/