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LEGAL DICTIONARY

Probate

Probate is a legal process in which a last will and testament is reviewed to determine whether it is authentic and legally valid. This term also refers to the administration of the deceased person’s will and their estate assets.

This process begins when the asset-holder passes away and the court appoints the executor defined in the will to carry out the probate. If there is no will, an administrator will be designated by the court to perform the process instead.

Probate involves appraising the deceased person’s property, paying any outstanding debts or taxes, and distributing the remaining estate as per their last testament. Read on to learn more about how this process works and why it's recommendable to avoid it if possible.

When Is Probate Required?

Probate is not always required, but unless steps have been taken to avoid it, it’s very likely that it will be necessary to undertake this process. State probate laws can also play a big role in deciding whether probate is needed.

Therefore, it’s important to check your states’ specific laws when deciding whether to apply for probate. There are also certain situations in which probate is always required, the most common of which are listed below:

  • If there is no will
  • If there are problems with the will
  • If there are no beneficiaries
  • If it is specifically required by the estate

How Does the Probate Process Work?

There are various steps involved in the probate process. These will mostly be carried out by the executor of the will. This is a legal representative that will be responsible for identifying and managing all the deceased person’s assets.

The executor is generally a financial advisor, and their details can be specified within the will. If there is no last testament, the state probate court will appoint someone else to carry out this role. Furthermore, if there are no rightful heirs or claims to the estate, all assets will be turned over to the state in a process called “escheatment”.

In general, the probate process can vary from state to state, but the following steps will typically be involved and carried out by the executor:

  1. A petition needs to be filed to begin the probate
  2. Notice must be given to the creditors, beneficiaries, and heirs
  3. Assets are collected, inventoried, and appraised
  4. Outstanding debts, taxes, and bills must be covered
  5. Remaining assets are distributed to rightful beneficiaries
  6. Legal documents such as receipts and records are submitted to the court and the estate is then closed

Disadvantages of Probate and How to Avoid It

Probate can be a lengthy process with a high amount of time investment for all parties involved. Because of this, court costs and fees can also quickly rise. The American Bar Association found that probate fees can consume between 6% and 10% of an estate.

Taking into account the expenditures that arise from complicated probate processes, as well as the potential conflicts that can occur between the parties, it’s recommendable to try and avoid this process.

Use the following methods when estate planning to minimize the chance of probate and to ensure a will is administered without legal challenges:

  • Implement joint ownership on assets
  • Keep estates small
  • Set up a living trust
  • Use beneficiary deeds if allowed within your state

Probate is a legal process in which a last will and testament is reviewed to determine whether it is authentic and legally valid. This term also refers to the administration of the deceased person’s will and their estate assets.

This process begins when the asset-holder passes away and the court appoints the executor defined in the will to carry out the probate. If there is no will, an administrator will be designated by the court to perform the process instead.

Probate involves appraising the deceased person’s property, paying any outstanding debts or taxes, and distributing the remaining estate as per their last testament. Read on to learn more about how this process works and why it's recommendable to avoid it if possible.

When Is Probate Required?

Probate is not always required, but unless steps have been taken to avoid it, it’s very likely that it will be necessary to undertake this process. State probate laws can also play a big role in deciding whether probate is needed.

Therefore, it’s important to check your states’ specific laws when deciding whether to apply for probate. There are also certain situations in which probate is always required, the most common of which are listed below:

  • If there is no will
  • If there are problems with the will
  • If there are no beneficiaries
  • If it is specifically required by the estate

How Does the Probate Process Work?

There are various steps involved in the probate process. These will mostly be carried out by the executor of the will. This is a legal representative that will be responsible for identifying and managing all the deceased person’s assets.

The executor is generally a financial advisor, and their details can be specified within the will. If there is no last testament, the state probate court will appoint someone else to carry out this role. Furthermore, if there are no rightful heirs or claims to the estate, all assets will be turned over to the state in a process called “escheatment”.

In general, the probate process can vary from state to state, but the following steps will typically be involved and carried out by the executor:

  1. A petition needs to be filed to begin the probate
  2. Notice must be given to the creditors, beneficiaries, and heirs
  3. Assets are collected, inventoried, and appraised
  4. Outstanding debts, taxes, and bills must be covered
  5. Remaining assets are distributed to rightful beneficiaries
  6. Legal documents such as receipts and records are submitted to the court and the estate is then closed

Disadvantages of Probate and How to Avoid It

Probate can be a lengthy process with a high amount of time investment for all parties involved. Because of this, court costs and fees can also quickly rise. The American Bar Association found that probate fees can consume between 6% and 10% of an estate.

Taking into account the expenditures that arise from complicated probate processes, as well as the potential conflicts that can occur between the parties, it’s recommendable to try and avoid this process.

Use the following methods when estate planning to minimize the chance of probate and to ensure a will is administered without legal challenges:

  • Implement joint ownership on assets
  • Keep estates small
  • Set up a living trust
  • Use beneficiary deeds if allowed within your state