An individual’s will designates how personal assets should be distributed to beneficiaries upon death. A revocable trust enables the smooth transfer of those assets. Without a trust, if assets are titled solely in the decedent’s name, the estate must be funneled through the probate court. Understanding probate can go a long way in alleviating stress during an already difficult time.
Probate is the court-supervised process that transfers assets of someone who has passed away to the rightful beneficiaries. Depending on the complexity of the estate, the process can last roughly six months to two years. There are financial costs associated with probate, such as attorney and appraisal fees. These expenses can be hefty depending on the size of the estate.
Here are the typical steps of the probate process.
1) A petition is filed to open probate and a personal representative is appointed by the court.
Even if an executor was named in a will, before probate can begin that person must be authorized by the court. Executor, administrator and personal representative are different titles used to describe the person who will be managing the estate.
2) Notice of the death is given to potential creditors.
Any claims against the estate must be presented to the executor; there is typically a time limit within which a claim can be made.
3) Assets are collected and valued.
The executor needs to take inventory of and properly appraise the decedent’s assets before determining how and to whom they will pass.
4) The estate is managed by the executor.
This process includes opening an estate checking account to pay bills, maintaining investments and real estate, and filing appropriate income tax returns.
5) Remaining assets are distributed.
Once debts, expenses and taxes have been paid, the executor must distribute any remaining assets according to the decedent’s will. In the absence of a will, assets are distributed according to the state’s probate laws.