5 Things You Didn’t Know About Probate Procedures

When someone dies, their estate must go through a legal process called probate. This helps to ensure that the deceased person’s debts are paid and their assets distributed according to their wishes. Unfortunately, the process can be complex, but if you understand the basics, it can be much less daunting. Some of the things you didn’t know about probate procedures include:

You Need to Work with an Executor

An executor is a person who is responsible for carrying out the deceased person’s wishes as laid out in their will. If the deceased person did not have a will, the court will appoint an administrator to handle the estate. 

The executor or administrator will be responsible for gathering the assets, paying debts and taxes, and distributing the remaining assets to the beneficiaries. Additionally, the executor or administrator will need to file the necessary paperwork with the court to open and close the estate.

Probate Can Take a Long Time

The probate process starts when the executor files a petition with the court. Once the petition is filed, there is a waiting period of at least six months. This waiting period gives creditors time to file claims against the estate. 

After the six-month period, the court will hold a hearing to determine if there are any outstanding debts or taxes owed by the estate. If there are, the court will order the executor to pay them. Once all debts and taxes have been paid, the executor can distribute the assets to the beneficiaries.

However, if there is a dispute among the beneficiaries or creditors, probate can take much longer. Disputes can delay the distribution of assets for months or even years. This means that the whole process can take anywhere from six months to several years to complete.

Probate Can Be Expensive

The probate process can be expensive, as it involves court fees and the executor’s professional fees. Additionally, the estate may have to pay taxes, such as capital gains tax, on any assets that are sold. If the estate is large or complex, the costs can be even higher.

To help offset the costs, some people choose to set up a trust. A trust is an arrangement in which a person (the trustee) holds and manages property for the benefit of another person (the beneficiary). The trustee has a legal duty to manage the trust property for the benefit of the beneficiary. This can help to avoid probate, as the assets are transferred to the beneficiaries outside of probate.

Another way to offset the costs is to purchase probate insurance. This type of insurance can pay for the executor’s fees, court fees, and other expenses related to probate. Probate insurance can be purchased through an insurance agent or broker.

Different States Have Different Probate Laws

Probate laws vary from state to state. Some states have what is called “probate avoidance” statutes, which allow certain assets to be transferred outside of probate. For example, in some states, a person can transfer their home to their children through a deed. This would avoid probate because the property would not be part of the estate.

Other states have different rules for what assets are subject to probate. For example, probate in Florida is generally only required for assets that are worth more than $75,000. However, in California, probate is required for all assets, regardless of value. 

This means that it’s important to know the probate laws in your state before you start the process. You can find this information online or by speaking to an attorney.

You Might Not Need Probate

In some cases, you might not need to go through probate at all. This is usually the case when the estate is small or the assets are held in joint ownership or a trust. If you’re not sure whether or not you need to go through probate, you can speak to an attorney or financial advisor.

Bottom Line

In general, the probate process is important not only to understand from a legal standpoint but also from a financial and emotional standpoint. Grieving the loss of a loved one is hard enough without having to worry about the technicalities and logistics of their estate. However, it’s important to be prepared for what lies ahead, which includes knowing the ins and outs of probate.