Probate Explained In Four Steps
The very word "probate" has taken on a negative connotation in recent time, with a great deal of information available advising people on "how to avoid probate," as if it were a dread disease. There is some benefit in planning your estate to keep some of your property out of probate, which will allow it to pass quickly and seamlessly to your heirs in privacy, but you must still probate some assets. In fact, the probate process can seldom be avoided entirely, and it pays to understand what probate is and how it works. Read on for the four main steps involved in probate.
1. File the probate petition in court.
This step signals the official beginning of the probate process, with the last will and testament of the deceased becoming a public document. An executor will be named, who will partner with the estate attorney to oversee the probate. Beneficiaries will receive notice of the filing, and will have an opportunity to challenge any part of the will in court with a hearing. Additionally, a legal notice to any potential creditors who may have a claim on the estate will be published in a local newspaper for a specified period of time.
2. Take inventory.
An inventory of all debt and assets is performed by the executor, who is also referred to as a personal representative in some states. The inventory of assets may include stocks, bonds, bank accounts, retirement and pension accounts, real estate, vehicles, art, jewelry and more. For larger or more complicated estates, a professional appraiser may need to be hired to compete the inventory.
Additionally, the executor performs an accounting of all taxes and debt owed. Assets such as bank accounts may be used by the executor to pay taxes and bills. For estates with no liquid assets, the executor has the power to sell assets to bring debts and taxes up to date.
3. Distribution of assets.
Once the waiting period for any interested parties (creditors) has passed, the executor is tasked with ensuring that the estate is distributed according to the wishes of the deceased. The estate now becomes final in court and includes an accounting of all financial transactions carried out by the executor on behalf of the estate.
4. Official transfers.
In this final part of probate, paperwork to reflect new ownership of all assets in the estate is accomplished. Quit claim deeds are completed to show real estate transfers and vehicles are retitled to show new ownership. The executor's responsibility now largely passes to the beneficiaries, who will simply need to show a copy of the probated will to accomplish the documentation changes necessary to have a property be in their names.
A legal and valid will that is updated on a timely basis can help ensure a quick and efficient probate process. Your financial planner and a local estate attorney (such as Edward G. Foster) will serve as invaluable resources when completing your will and keeping it current.