What Is Probate?

Rons-Blog

 

As an auctioneer, we periodically get calls from an attorney or a family member about disposing of property of someone who recently died. While the attorney understands the process of “probate,” many family members do not.

One of the first questions I ask a family member is, “Who owns the asset/property?” “How did the family member obtain ownership of the property, viz., a will, etc.” “Do you have authority to sell this property?”

Many will say that Dad or Ma said I could have so and so after they died, without any written evidence of such a bequest.

When someone dies, their property must go through a process called probate. What is probate? Probate is the process that transfers legal title of property from the estate of the person who has died (the “decedent”) to their proper beneficiaries (husband/wife, children, relatives, etc.).

The term “probate” refers to a “proving” of the existence of a valid Will, or determining and “proving” who one’s legal heirs are if there is no Will. Since the deceased can’t take it with them, probate is the process used to determine who gets their property. Just because Dad or Ma said you could have it after their death, doesn’t guarantee that you will get it.

The primary function of probate is transferring title of the decedent’s property to their heirs and/or beneficiaries for their keepsake or to dispose of it. If there is no property to transfer, there is usually no need for probate. Another function of probate is to provide for the collection of any taxes due by reason of the deceased’s death or on the transfer of their property.

The probate process also provides a mechanism for payment of outstanding debts and taxes of the estate, for setting a deadline for creditors to file claims (thus foreclosing any old or unpaid creditors from haunting heirs or beneficiaries) and for the distribution of the remainder of the estate’s property to ones’ rightful heirs.

Probate usually occurs in the appropriate court in the state and county where the deceased permanently resided at the time of his or her death. Such courts go by different names in various states. In many states the court is simply called the Probate Court. The probate court usually handles all the personal property the deceased owned, plus all of the real estate that the deceased owned that is located in that same state.

While there is no requirement to use a lawyer, probate is a rather formal procedure. One minor omission, one failure to send Aunt Susie a copy of the petition, or a missed deadline, can cause everything to come to a grinding halt or expose everyone to liability.

The death of a family member or friend sometimes tends to bring out the very worst in some people. Experience shows that even in close families there is a tendency to get overly emotional about relatively trivial matters at the time of a loved one’s death, such as who gets the iron frying pan and who gets the kettle. Such minor matters, or any delays or inconveniences can be upsetting, pose issues of fairness, and create unfounded suspicion among family members. Thus it generally is a very good idea to “let a lawyer do it”.

The cost of probate may be set by state law or by practice and custom in your community. While you can check with your lawyer, when all the costs are added up – and the costs may include appraisal costs, executor’s fees, court costs, costs for a type of insurance policy known as a “surety bond”, plus legal and accounting fees, probate can easily cost from 3% to 7% of the total estate value, and more. If there is a “Will contest” it could be much greater.

 

Typically the person named as the deceased’s Personal Representative (a more formal term is “Executor” or “Executrix”) goes to an attorney experienced in probate matters who then prepares a “Petition” for the court and takes it, along with the Will, and files it with the probate court.

The lawyer for the person seeking to have the Will admitted to probate typically must notify all those who would have legally been entitled to receive property from the deceased if the deceased died without a Will, plus all those named in the Will, and give them an opportunity to file a formal objection to admitting the Will to probate.

A hearing on the probate petition is typically scheduled several weeks to months after the matter is filed. Depending on the state, and sometimes who the named beneficiaries are, how long before the death the Will was signed, whether the Will was prepared by an attorney, who supervised the “execution” of the Will, and/or whether the Will was executed with certain affidavits, it may be necessary to bring in the persons who witnessed the deceased’s signature on the Will.

If no objections are received, and everything seems in order, the court approves the petition, appoints the Personal Representative, orders that taxes and creditors be paid, and requires the Personal Representative to file reports with the court to assure all the deceased’s property is accounted for and distributed in accordance with the terms and conditions of the Will.

Do you have real or personal property you would like to turn into cash? Give us a call at 252-257-4822. We are not lawyers, but if need be, we can steer you toward one.

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