What is a probate proceeding?
Probate is a court proceeding to supervise the distribution of a person’s estate (assets in their name) via instructions in their Will, or via the laws of intestate succession (without a Will), and/or to sort out disagreements or competing interests regarding the distribution of a person’s estate.
Where does a probate proceeding take place?
In the District Probate Court of the county in which the deceased person resided or owned property. Depending on the size of the county in which a person passes away and/or owns property, there will be a probate court or probate division with varying levels of activity and scheduling expectations.
When does a probate proceeding happen?
A typical probate proceeding may be opened once at least 5 days have passed since the date of death, and before three years have passed after the date of death. There may be support and maintenance issues involved with some proceedings, which could increase the level of urgency, but typically, probate is a slow-moving and deliberately careful process, in order to provide notice of the proceedings, consideration, and time to respond to those who may need to be involved.
Why would I need to open a probate proceeding?
There are several reasons why one may or must open a probate proceeding. The most common reason is that there exists one or more probate assets that cannot be distributed without administrative court supervision or a court order. If there exists a probate asset owned (or partially owned) by the deceased, it will likely require the probate system to retitle or distribute that asset to someone else. There are alternative distribution tools that do not involve the court, but the law restricts those tools to assets that 1) are not real estate, and 2) where the total of all probate assets is less than $75,000.
Who is involved in a probate proceeding and who decides to open one?
Anyone who has a financial interest in the distribution of the deceased person’s assets may open a probate proceeding. Included but not limited to the cast of “interested persons” would be, for example, family members, creditors, anyone mentioned in the will, which would include person(s) nominated to serve as Personal Representative (“Executor”), in addition to persons mentioned in the distribution plan. Keep in mind that creditors have a right to open a probate proceeding once 30 days have passed after the death if a family member or other interested person has not already done so. Since the individual or entity that opens the probate proceeding shoulders the (potentially reimbursable) court costs to file the necessary paperwork, creditors will likely weigh the value of pursuing what they are owed.
How much does it cost?
The costs depend on how one wishes to proceed. If one opens a probate proceeding pro se (meaning, without an attorney representing you), it will likely cost hundreds of dollars (less than $1,000 for many typical probate proceedings), as opposed to engaging an attorney to represent you in the process, which will likely cost thousands. I leave the answer very general because each probate has its own costs, and attorney fees vary dramatically depending on who you hire and what you are hiring them to accomplish for you. Keep in mind the following: probate is a long process and is full of potential missteps – for you DIYers, I would not recommend doing this unless you plan on spending a great deal of time educating yourself and researching the expectations of the proceedings. The courts have many instructions and self-help resources online provided for people who want to do it on their own, but the court personnel are not able to provide legal advice. I have seen this frustrate many a DIYer.
Who pays for the court costs and attorney fees?
Assuming there are assets enough in the deceased person’s estate, any costs of the probate proceeding (including attorney fees) are reimbursable. Costs associated with a probate proceeding are called “administrative costs” and they fall very high on a payment priority list outlined in the law. Costs associated with the deceased’s last illness (the one that led to their death), their funeral and burial are also high on this priority list. To the extent the deceased has the money to reimburse for these expenses, they will be reimbursed in a defined order.
What are some of these costs?
The costs (without attorney) are typically court filing fees, certified documents, publication of notice, postage, death certificates, recording costs, to name just a few. If you hire an attorney, however, the cost increases to include attorney fees, customarily at an hourly rate. The attorney supervises and advises the personal representative (“executor”) on the entire process (who, what, where, when, why, how), they draft and file your documents for you, explain what your job is and how to accomplish it, and come to court with you to interact with the Judge and Court Administration. If something gets complicated, it’s the attorney’s job to help you understand what your choices are and which choices would serve and protect you and your obligations and interests most effectively. Obviously, if there are no arguments among the interested parties, the costs remain on the lower end. And, if disagreements take more time to sort out, the costs go up. So, if you’re interested in keeping costs down, you’ll want to try to keep disagreements to a minimum.
How long will it take?
In my experience, it requires anywhere from 8 – 24 months, depending on how complicated the assets and debts are to discover, gather, and organize; how complicated it is to find all interested parties required by law and provide them notice of the proceedings; and a myriadof other potential complications, such as foreign assets or beneficiaries, business assets, liquidation issues, creditor disputes or family disagreements resulting in litigation, valuation issues involving assessors/experts, tax issues (which can include tax preparation issues), to name just a few. I try to prepare my clients going through this process that it feels like everything is in slow motion. This is often because of a combination of busy court scheduling for necessary hearings, and notice requirements which have obligatory waiting periods to allow individuals and creditors ample time to respond to the proceedings. Probate proceedings can be extended for years, but that would most certainly be for very large and/or very complicated estates.
Can I arrange to avoid a probate proceeding for my own estate?
Yes, with careful estate planning, although I can think of a few reasons why it may be more trouble than it’s worth in some cases.
Let me start by explaining how to avoid probate: In short, all probate assets (or at least all but no more than $75K of non-real estate assets) need to be transformed into non-probate assets while you are still living, and this can be done by a carefully organized estate plan. What is a non-probate asset? Anything with a beneficiary (like life insurance), a payable-on-death designation (like a POD on a bank account), or a transfer-on-death designation (like a Transfer-on-Death Deed for your home). These three designations mean the same thing – that you are naming the person(s) you would like to own the asset after you die. Basically, you’re doing the work of the court in advance of your death. There are other ways of transforming a probate asset into a non-probate asset, such as joint ownership with rights of survivorship (means that the survivor(s) becomes the sole owner). This is used often with spouses and their real estate – when the first joint owner passes away, the surviving spouse is the sole owner. But, once there is only the survivor, if the survivor does not add another joint owner, or does not execute a Transfer-on-Death Deed, the second spouse’s estate will require probate.
Here are some reasons why for some people, either they or their assets, are not suited to avoid probate. For example, some people have very complicated beneficiary designation schemes which need to be continuously checked and updated, or people may have underage children or disabled beneficiaries who cannot directly accept assets and there is not an alternative tool (such as a trust), or other people may have complicated tax ramifications that may require individual beneficiaries of assets to be able to disclaim some or all of the asset(s). These are certainly not the only reasons one may choose not to carry out a probate avoidance plan – but, all options should be assessed and evaluated to see what is better for you financially and for those you leave behind, as well as assessing the level of attention and upkeep you are willing and able to perform to make whichever plan you select work. It is important to remember that your will only passes probate assets, while your non-probate assets do not need your will. But, that’s for another “Top Ten” blog entry.
An estate planning attorney can assist you with making your plans come to fruition, and a probate attorney can help you with a probate proceeding. Many estate planning attorneys practice in both areas.