When you’re grieving the loss of someone close to you, the last thing you want is to worry about probate law. However, it’s important to understand probate laws because they can greatly impact beneficiaries. And if you’re the executor of a decedent’s will, you must know at least the basics of probate law.
Below, you’ll learn about the role of the executor, the general probate process, and a few challenges you might face in probate. You’ll also discover whether it’s possible to avoid probate and how to do so.
What Is Probate?
Probate is a process that involves dissolving a deceased person’s estate in court. This process is intended to prevent fraud by ensuring that all creditors are paid and that all beneficiaries receive their fair share of the estate as the decedent intended.
Probate is required in most cases, even if the decedent didn’t have a will. Additionally, probate laws can vary significantly by state. If you’re going through probate, it’s smart to hire a probate attorney who can explain your state’s laws (and uniform probate code, if the state has one) to you in plain English.
Who Can Serve as the Executor of an Estate?
The person whom the decedent named in their will serves as the executor of their estate. Anyone can serve as executor: a family member, a lawyer, an accountant, or someone else the will maker trusts.
Generally, the only requirements for someone to serve as an executor are:
- They must be at least 18 years old
- They must have never been convicted of a felony
What happens if the deceased didn’t name an executor or didn’t have a will? A family member or friend can request to serve as the estate’s administrator in this case. If no one accepts the role, the court will assign someone to it per probate law.
Executor Responsibilities
The executor of an estate has a big job ahead of them. Administering an estate is stressful and time consuming, which is why many executors hire a probate attorney for help.
If you’re the executor, here are the tasks you’ll need to perform for probate.
Take Inventory of the Decedent’s Assets
As the executor, one of your main jobs will be inventorying the decedent’s assets. If they have a large estate, this can take a few weeks or longer. Examples of assets you may need to inventory include cars, artwork, collectibles, bank accounts, cash, etc.
Once you’ve inventoried all assets, you must secure them until distribution occurs. This could involve placing assets into a storage unit or a safe deposit box at the bank.
Notify Heirs
You’ll need to notify all heirs named in the will of the decedent’s death. This might sound simple, but it can be challenging if some heirs live “off the grid.” You might need to hire a private investigator to help track them down.
Notify Creditors
Next, you must notify all creditors of probate. Creditors are people and companies to which the decedent owes money.
In many states, you must notify creditors by placing an ad in a local newspaper (this practice seems rather outdated, but it’s the law in some places). In other states, you can mail notices directly to creditors.
Pay Debts
Once you’ve notified creditors, you’ll have to pay the decedent’s debts, including their taxes. This money comes out of the decedent’s estate.
Manage the Estate
Per probate law, you will need to manage the estate until the distribution of assets occurs. For example, if the decedent had a business, you might need to continue paying employees.
How Does the Probate Process Work?
Probate is a multi-step process that occurs over a few weeks or months. The steps are as follows:
- File a petition with the probate court. Once you’ve done this, the court will assign an administrator (usually the person named in the will).
- The executor notifies heirs and creditors of the deceased’s passing. They’ll need to pay any estate taxes and debts the decedent owes.
- The executor manages the decedent’s assets until they can be distributed.
- The executor distributes assets according to the will. If there is no will, the court will distribute assets according to intestate succession laws.
- Lastly, the executor must file a petition to close probate. If the executor fails to close probate, they may be liable for claims made against the estate.
Probate Challenges
The probate process can be fraught with potential challenges, such as:
- An heir might challenge the will. For instance, they might say that the decedent wasn’t of sound mind when writing it.
- The executor may not perform their duties properly or act in the beneficiaries’ best interest. Beneficiaries might have to petition the court for a new administrator.
- The decedent might have property in multiple states, making tracking down all their assets tough.
Is It Possible To Avoid Probate?
In some cases, it may be possible to avoid probate. Most states have an informal probate process for small estates. To qualify as “small,” an estate’s value must usually be $10,000 or less.
Transferring certain assets (called non-probate property) directly to beneficiaries may also be possible without placing them in probate. For example, if you own property with someone, and the property has the “right of survivorship,” that property automatically goes to the other owner after you die.
If you have a bank account that you’d like to pass on to someone directly, you can add a “payable on death” designation to the account. The account would then go to your named beneficiary once they prove to the bank that you’ve passed on.
Another option is to set up a living trust. To do this, you’ll place assets into the trust and then name a successor trustee. Upon your death, the trustee can distribute assets per your wishes without going through probate.
Because probate laws vary widely by state, it’s best to talk with an estate planning attorney to avoid probate.
Discover More About Probate Law
Want to learn more about probate law? Contact Rockpoint Probate Funding now at (323) 484-1063.
