The death of a loved one is an emotionally challenging experience. In the aftermath of a loved one’s passing, many individuals find themselves facing the legalities associated with dealing with a deceased individual’s affairs.
In some cases, this proves to be dealing with some outstanding bills and packing up a small number of personal belongings. In other situations, family members or friends need to pursue what is legally known as probate to deal with a deceased loved one’s estate.
If you find yourself in such a position, you likely have heard reference made to estate and probate matters. You may have heard about probate court, perhaps even by watching television programs or films. Even being aware of the term probate, you may be like most people and not really fully appreciate what is meant by probate in the aftermath of a person’s death.
Individual State Laws Govern Probate and Estate Law
Each state has its own probate code as part of its statutes. With that said, there is some commonality between the probate code or laws in each state in the United States. However, you need to be aware that what is included in the probate code in one state may not be part of the law in another.
Over the course of the past three decades, an effort has been to attempt to bring some uniformity of the probate laws in the 50 states. As a result of that effort, 18 states have adopted what is called the Uniform Probate Code, or UPC. As a result, states that have adopted the UPC have the most similar types of probate codes. Nonetheless, each state made its own individualized changes to the law. Therefore, even in states that have adopted the UPC, you must make sure you are focused on the law in the state in which your loved one died.
The states that have adopted the UPC are Alaska, Arizona, Colorado, Florida, Hawaii, Idaho, Maine, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Carolina, South Dakota, and Utah. The remainder of the states and the District of Columbia have not enacted this version of probate law.
The Basic Preliminary Stages of Probate
In states with and without the UPC, the essential preliminary stages of probate are very similar. The most essential first step in the probate process is ascertaining whether or not the deceased individual has created a last will in testament. In the alternative, a determination must be made if some sort of trust has been established to address the deceased person’s assets following his or her death. Depending on whether or not a person died with a will, there are different initial probate procedures that must be followed.
Preliminary Steps to Probate an Estate With a Will
Not every estate with a last will and testament will need to undergo a formal probate process. The laws on the books in a specific state provide guidance as to whether a will needs to be probated. Ascertaining whether a will needs to be probated is discussed in greater detail later.
For the purposes of discussion, assume that under the circumstances surrounding an estate, a particular will must be probated in court. The first step in preparing to probate an estate with a will is to obtain the original copy of the last will and testament of the deceased individual. As a general rule, courts require that the original will be provided to the court to commence the probate process.
The original will is required over a copy because of its reliability. The theory is that the original version of a document is less susceptible to being altered. Moreover, the authenticity of a last will and testament can be more easily verified when the original copy is presented to the court.
A petition or application for probate is prepared. This is what technically is known as a pleading. A pleading is a certain type of document submitted in court proceedings.
The petition requests that the court probate the will and appoint the person named in the will to serve as the executor of the estate. The last will and testament identify the person that the creator of the instrument desires to serve as executor. In basic terms, the executor is the individual designated to ensure that the wishes of the person who created the will are carried out upon his or her death.
Preliminary Steps to Probate an Estate Without a Will
If a person dies without a will, and the probate code in the state in which the death occurred requires the commencement of the probate process, the probate process must be commenced. As is the case with a will, the process takes place in the probate court in the county in which the individual without a will died.
A petition or application for probate is prepared, in a manner relatively to similar to that which occurs when a will exists. However, the petition or application requests that the court appoint a personal representative or administrator for the estate of the person who passed away without a will.
Typically, a personal representative or administrator is a family member of a deceased person. In some situations, the court will appoint an attorney to serve in this capacity. As is the case with an executor, a personal representative or administrator is the person designated by the court to address matters associated with a person’s estate.
Testate Versus Intestate Succession
The laws in all states address what is known as testate or intestate succession. These are legal terms that delineate the presence or absence of a will. Testate succession is the distribution of a deceased individual’s assets according to the terms and conditions of his or her last will and testament.
Intestate succession is the manner in which a deceased person’s assets are distributed when that individual dies without a will. In the case of intestate succession, the laws of the state in which a person died govern how his or her property is distributed following death.
General Steps in the Probate Process
Noting that each state’s law regarding the probate process differs bears repeating. This particular is the case between states that have adopted the UPC and those that have not. Nonetheless, a general overview of the probate process is helpful in assisting you to better understand what you face following a person’s passing.
If the probate of an estate is necessary, an initial hearing is held after the petition or application is filed. The purpose of this hearing is to address a number of basic issues.
First, if there is a will, the court makes a determination regarding its authenticity or validity. In most states, more often than not, the validity of the will is undertaken by examining the instrument itself. Most wills written in recent years contain what is called a self-verifying provision.
A last will and testament are not only signed by the person who created it, but also by a designated number of witnesses. The self-verifying provision of a last will and testament is the section signed by witnesses to the actual signing of the instrument.
The witnesses verify that they witnessed the signing of the will. By signing as witnesses to the signing of a will, the witnesses verify that the person who executed the will was of sound mind and body and signed the will as a free and voluntary act.
If a self-verifying clause, or self-proving affidavit, is not contained in the last will and testament, the witnesses to the execution of the instrument need to appear in court. In court, they testify under oath that the deceased individual was of sound mind and body when the will was signed. They will further testify that the will was signed freely.
The executor or administrator will be appointed formally by the court at this initial hearing. The court will issue what is known as letters of executor or letters of administration, depending on whether or not a will exists. Letters represent the legal document which gives an executor legal authority to act on behalf of the estate.
Some other business takes place at the time of the initial hearing. This includes confirming the final deadline by which creditors can make claims to the estate for unpaid bills or accounts. A newspaper legal notice is published advising creditors of the death of the person whose estate is being probated. The notice includes the deadline for submitting claims.
The executor or administrator is also directed to prepare a full and complete inventory of the estate. A date will be set by which the inventory must be submitted to the court.
Fiduciary Duty of Executor or Administrator of Estate
The laws in all 50 states establish what is known as a fiduciary duty of an executor or administrator of an estate. In the legal realm, a fiduciary duty mandates that a person exercise the highest standard of care. A fiduciary duty requires an executor or administrator to act in the best interests of the estate and its heirs.
Executor or Administrator
Because of the existence of fiduciary duty in the probate process, an executor or administrator cannot improperly benefit from his or her role with the estate. With that said, an executor or administrator can be a paid a fee for his or her services to the estate. However, the fee must be approved by the probate court.
Challenges to Last Will and Testament
If a challenge is going to be made to a last will and testament, the probate court and the executor or administrator of the will is advised of that issue at the beginning of the judicial process.
There are some common types of challenges made to a last will and testament. One common challenge is the contention that the person who executed the will was not of sound mind or body the time of the execution of the instrument. Another common challenge to a last will and testament is that the person who executed the instrument did so under duress. In other words, the deceased person prepared and signed the will under duress. Finally, another type of relatively common challenge to a will is that the instrument in question truly is not the last will and testament of the deceased. The contention in such a situation is that the deceased person actually revoked the will presented to the court and executed a new one.
The court will schedule additional proceedings to address challenges to the last will and testament. Oftentimes, an executor or administrator is best served by retaining legal assistance in the event of a challenge to the will, if an attorney previously had not been retained to assist with the affairs of the estate.
Cost to Probate Estate
There are certain costs associated with probate. All courts in the United States have set fees to probate an estate. The fees charged to probate an estate vary fairly significantly from one jurisdiction to another. Indeed, there can be some fairly dramatic differences in the cost of court probate fees between courts in the same state.
The clerk of the court in the county and state in which an individual died maintains a fee schedule that is available to the public. Oftentimes, the fee schedule is available at the court’s website. In addition, the fee schedule will be available at the courthouse.
Another cost associated with the probate of an estate is the newspaper legal notice or legal notices. Again, the costs to publish a legal notice in a local newspaper vary broadly from one location to another. Both the clerk of the court and the newspaper responsible for publishing legal notices, including those for probate matters, will have a cost schedule to assist you in ascertaining what a legal notice or notices are likely to cost.
An executor or administrator if an estate can be paid a fee for his or her service to the estate. State law, local court rule, and the judge presiding in a particular estate case will establish the fee to be paid to an executor or administrator. There are also instances in which an executor or administrator is not paid a fee for working on an estate in probate.
If an estate is more complex, or if a challenge is made to the will, oftentimes a lawyer is hired by an executor or administrator to assist in the addressing the affairs of the state and the probate process. Attorney fees are paid by the estate itself.
With that said, more often than not, fees paid to legal counsel who is involved in the probate process need to be approved by the court. In other words, before a payment is made to legal counsel, the court authorizes the amount of money to be conveyed to the estate lawyer.
Other costs associated with the probate process vary depending on the facts and circumstances of a case. For example, if the real estate needs to be sold, appraisal fees and other costs related to the sale and transfer of title to the property may be incurred.
Taxes and an Estate in Probate
There are five potential types of taxes that might arise during the probate process. First, depending on the status of the deceased individual at the time of his or her death, income tax might be due and owing. In the alternative, the estate might be entitled to an income tax refund. In any event, an income tax return may need to be prepared and filed by the estate during the probate process.
A federal estate tax return may need to be prepared and federal estate taxed paid. This must be accomplished within nine months of the deceased person’s death. Keep in mind that most of the estates are not large enough to be required to pay federal estate taxes. In addition, those estates that otherwise would be large enough to be required to pay federal estate taxes typically do not become part of the probate process. The assets of these individuals are dealt with through trusts to avoid such things as estate taxes.
Some, but not all, states impose taxes on estates. Once again, most estates will not owe estate taxes, unless they are large. As is the case with the federal estate tax, a state estate tax return typically must be filed within nine months of a deceased individual’s death.
Heirs receiving assets from the estate may be required to pay inheritance tax. There potentially can be both federal and state inheritance tax obligations. If there is this type of tax liability, it is also addressed during the overall probate process.
Paying Bills of the Estate
Once letters are issued by the court granting power to an executor or administrator to go to work on behalf of an estate, a bank account for the estate typically is opened. Through the bank account, the legitimate bills due and owing are paid by the estate.
As noted previously, creditors of the estate are provided a deadline by which they must submit their claims for payment. Oftentimes, bills from creditors are associated with the deceased individual’s last illness. In addition, funeral and burial expenses typically are part of the cache of bills submitted to an estate for payment during the probate process.
Distribution of Assets to Heirs of the Estate
One of the major tasks of an executor or administrator of an estate is the distribution of assets to the heirs of the estate, to the heirs of the deceased individual. If a last will and testament exist, the distribution is done in accordance with the provisions of that instrument. If not will exists, state law governs the distribution of assets.
Bills and taxes associated with the estate are paid prior to the distribution of assets to the heirs of the estate. In addition, depending on the jurisdiction and related issues, court approval of the proposed distribution of assets must occur before the property or money is conveyed from the estate to heirs of the deceased individual.
Once debts are satisfied, the executor or administrator might be required to return to court to schedule a hearing on the final distribution of assets. If that is the case, notice must be provided to all of the heirs, as required by law or rules of the court. Oftentimes, an executor or administrator will transmit the notices via certified mail so that there exists no question about an heir receiving the notification.
Assuming that no one objects to the proposed distribution of assets of the estate at the court hearing, the judge will approve the proposed distribution. The executor or administrator will then convey assets to designated heirs. When the asset is conveyed to an heir, the executor or administrator obtains a receipt from the heir. These receipts ultimately will be filed with the court, if required by the judge or rule.
Once all of the assets have been appropriately distributed, the executor or administrator returns to the court one final time. The executor or administrator submits a final accounting to the court. He or she also requests that the court dismiss the executor or administrator from any further obligation to the estate. At this juncture, the probate process comes to an end.
Types of UPC Probate Procedures
The Uniform Probate Code, or UPC, provides three different types of probate procedures in those states that have adopted this law. In addition, even in some states that have enacted the UPC in its entirety, these jurisdictions have enacted laws that permit some variation when it comes to the probate process. The formal probate process is what has been discussed in detail and is utilized in the UPC and non-UPC states.
In UPC states and some other jurisdictions, informal probate is permitted. Informal probate is available if the estate is not particularly large and the heirs get along.
The informal probate process begins when a petition or application is filed with the court requesting informal probate and asking the court to approve a personal representative to oversee the process. In the case of informal probate, the UPC makes no distinction between an executor or administrator and just utilizes the term personal representative.
If the court approves, letters will issue to the designated personal representative. This is the same type or order utilized in the formal probate process discussed in detail previously.
With the letters, the personnel administrator is able to take care of all of the business of the estate. This includes addressing tax issues, paying bills, and distributing assets to the heirs. There is no court involvement in these tasks.
When all of this is accomplished, the personnel administrator returns to court one more time and files a final accounting with the court. A closing statement is also filed at this time. If the paperwork appears in order, the personal representative is discharged from further obligation to the estate.
There is also an unsupervised formal probate procedure. In this type of case, the court is a bit more involved than in a case using the informal procedure. Unsupervised formal probate is something of a hybrid between informal probate and formal probate.
The court is involved in an unsupervised formal probate process to address some issues that cannot be dealt with in the absence of a judge. For example, if there is some issue about who the heirs to the estate are in a particular case, unsupervised probate at be the appropriate process.
The benefits of both informal and unsupervised formal probate are two-fold. Both of these procedures usually are faster to conclude than formal probate. Moreover, informal and unsupervised formal probate tend to less expensive processes than formal probate.
Legal Assistance in Probate
If you are designated to be an executor or administrator of an estate, give serious consideration to obtaining legal advice and assistance. Estate law and the probate process can prove to be complex. A misstep during the probate process can result in serious negative consequences.
Although this article is designed to give you a thorough overview of the probate process, you likely may still have questions. Because this article is not designed to provide you with legal advice, you can always take the next step and schedule an initial consultation with a probate lawyer. As a general practice, probate lawyers in the United States do not charge a fee for an initial consultation with a prospective client.
During an initial consultation, a skilled, experienced probate lawyer will provide you with an evaluation of your case. This will include a closer examination of the probate options available not only in the state where the deceased individual passed away but in the specific county where probate proceedings will be brought. You will also have the opportunity to present any additional questions you might have about probate.