Probate is the legislative procedure of assembling a deceased person's assets, paying debts and obligations, and transferring the remaining to heirs. Unless family members or creditors are at odds, there is little legal oversight, and a lot of paperwork.
Here's an overview of the probate hearing process in most states. In states that have embraced the Uniform Probate Code in its entirety, the process is simpler and speedier.
Many estates, even those with substantial assets, qualify as "small estates" under state law and do not require typical probate. Solicitors may be able to use a shortened probate hearing process or even transfer property without going to court.
- Executorship is Requested at the Outset of the Probate Process
When probating a will, you first seek the probate court to select you executor or personal representative, depending on your state's terminology. In some states, when there is no will, you may be able to request to be the "administrator."
Probate courts in the county in which the deceased person lived at the time of death are likely to require an appeal, a death certificate, and the actual deed to process this request.
Your request will very certainly be made public through the use of a petition or application. It must include details like the date of death, names of remaining family members, and beneficiaries listed in the will, among other things. If your court doesn't offer fill-in-the-blanks paperwork, you'll have to make something out from scratch. The requirements and process of each probate court can differ depending upon the state and its legal obligations.
If the deceased person had properties in more than one jurisdiction in the same state, you can manage all of their estate in a single probate. Probate proceedings in the other jurisdiction are not required in such a scenario.
- Understanding the Process of First Probate Hearing
The probate court will arrange a hearing for anyone who wishes to contest your appointment as executor. Before the hearing, you must give official legal notice to the will's beneficiaries and heirs. A formal notice in the newspaper as well as a notification to known creditors will also be issued by you.
In most cases, you are not required to attend the hearing. If the court agrees to your motion, you will be capable of acting on authority of the deceased's estate. Letters of Administration are used in the absence of a will to carry on the probate court processes. "Letters" is a common moniker for these objects or properties that the deceased person has left.
In some areas, additional criteria may apply. For example, you may be required to name a local citizen as your "agent" in court. They can accept legal documents on your behalf and are subject to judicial jurisdiction.
- Posting a Bond
It's an insurance policy that covers the estate up to a particular amount of harm you do.
In the majority of the wills, no collateral is needed for legal proceedings. If the will doesn't say anything about the bond, the judge will take care of it and address the issue accordingly. All parties must agree in writing that this bond is necessary before it may be mandated by the judge. However, if the executor lives out of state or isn't named in the will, some courts require a bail.
The value of the estate determines the bond amount. Most bonding companies, which are primarily insurance subsidiaries, charge around 10% of the bond's face value. The estate can pay for the bond.
- Proving the Will's Validity
If a will exists, you must demonstrate that it is valid. Only a signed declaration, termed as a "self-proving affidavit," with signatures by one or more witnesses when they observed the will, or a swearing statement signed by one of the witnesses is generally required to prove the validity of a will.
- Paying Off Debt
A bank account may be opened in the estate's honor to pay off debts throughout the probate hearing process. Unpaid bills (credit cards, electricity, burial expenses) and taxes are included. Probate cases must also be open for a certain period of time to allow creditors to file claims.
You'll need to present the court with a list of the deceased's assets and have them assessed if necessary. Selling real estate or a business may require judicial approval. The governing body gives many executors the authority to pay liabilities and sell estate assets without the court's consent.
- Tax Compliance
As executor, you'll be responsible for ensuring that all taxes are paid on schedule and submitting tax forms is also your responsibility. Here some sort of tax returns that you may be required to submit:
- Returns during the last months of a deceased person's life if the deceased individual died before submitting the preceding year's federal and state income tax returns
- Depending on the valuation of the estate, the estate may also be required to file an inheritance tax return (for assets valued at above $11.58 million) during the probate process
- State inheritance tax returns and state estate tax returns are required in just a few states for estates worth more than a certain amount (only in 6 states)
Don't be disheartened if all of these tax returns seem like a lot of effort; you're unlikely to need to submit more than a couple. Remember that professional tax advice is widely available and can be compensated for with estate assets.
- Transferring Assets to Beneficiaries Earlier Than Expected
Until the estate's obligations and taxes are settled, you cannot distribute the estate's assets to the beneficiaries. In order to avoid probate, you can transfer some assets prior to death as long as you have enough money to cover final expenses. State regulations may restrict your capacity to provide gifts, and a judge's approval may be required in advance.
A quick distribution of assets may be justified, especially if the estate has the means to pay off debts. For example, a parked car loses value and is difficult to maintain. The same may be true for non-monetary household items. Some recipients, like a college student, may be in need of funds right now.
Remember that dealing with beneficiaries is a legal requirement. If you make early payouts, avoid choosing beneficiaries who are close to you.
The Bottom Line!
These are some of the most typical phases in any estate's probate hearing procedure. However, you should bear in mind that the process can differ slightly depending upon the state’s law or your unique case.