The Complete Guide to the Probate Process

business litigationProbate is a process used by courts to settle the affairs of a deceased person. This legal process ensures that the estate fills its obligations and that its assets are distributed fairly according to the law.

When there is no will, then the courts will decide an equal division between all eligible beneficiaries. Once this happens, the estate will be divided into probate assets and non-probate assets.

As the terms suggest, there are assets that will be naturally immune from the probate process. These non-probate assets typically include assets like life insurance policies that already have a designated beneficiary or assets that are funded by a trust.

However, what is considered probate assets?

Probate Assets Include:

  • Real estate that is owned alone without a secondary owner on the deed
  • An investment account that is not qualified for probate exclusion
  • Businesses owned solely by the deceased
  • Any asset that is owned by the deceased individual that does not have a death designation or a beneficiary.

This often means your house (if not married), car, or even that antique vase you keep on the mantle will all go through probate because there is not a designation on where it will go after death.

If there is a will, these assets will still need to go through probate, but you will retain control over how those assets are distributed.

Often if you pass away without a will, the court will decide that as much of the estate is liquidated and the profits from it will be split.

This is often why it is so important to create a will, especially if you have a number of precious items that you do not want to be sold off.

How Long Does Probate Take

While family members and executors have four years to file after a person has died, one question that can be overlooked is how long can the process take?

When a family member or friend asks someone to handle the probate process after their death they are often not sure exactly what they are asking for.

This step takes a lot of trust and disclosure and can be an honor for the executor but it takes time and energy.

The executor must be prepared to take at least six months of their own time to settle the estate of their friend or family member for a smaller estate without disputes and up to eighteen months for larger estates.

If the family disputes the settlement of the estate this process could take even longer. It is important to realize that the death of a family member is a stressful time for anyone, and becoming an executor of the estate will add to that stress.

You will need to be accountable for every piece of property, down to the penny, that your family member owns.

How to Freeze Trust Assets for a Trust Contest

One of the benefits of creating a trust is that once the settlor, or creator of a trust, passes away, the trustee can smoothly take control of trust assets and start a probate.

However, this can also be an issue for any beneficiary that wishes to contest the trust.

The issue is that a trust contest will need to be filed, but even then the trustee can on with the probate.

By the time the trust contest is even resolved, there may be no assets left in the trust, which means the first step of a contesting beneficiary is to make an effort to freeze trust assets.

There are two primary ways to go about this.

Place a Lien on the Property

If you wish to protect real estate assets for a trust contest, you can place a lien on the property for a pendency of an action.

This means a trustee cannot sell it off or refinance until that lien is lifted because there is an action pending against it, so thus they cannot get rid of it before the trust contest is over.

A Temporary Restraining Order or Injunction

Another solid option is to pursue a TRO against the trustee and the trust. If granted, this will protect trust assets from being wasted.

The unfortunate downside is that TROs can be fairly difficult to get granted by the courts. Often you need to prove the likelihood of your trust contest claim success.

However, a TRO becomes much more likely to be granted if you believe a trustee is personally taking money from a trust for themselves. In this case, courts will be more likely to put the order in place.

By following the legal procedures, there is eventually a cut-off date for any unascertained creditors. This keeps creditors from coming back months or even years later and demanding payment.

Probate and Estate Planning

The legal process of dispersing property after one passes is known as probate. It is there that everything that the deceased owned is collected and debts are paid.

Once that is complete, the property is distributed as the deceased requested when he or she went through estate planning.

It is at that point that he or she named an executor and had a will written. Most of the time, the executor is either the surviving spouse or an adult child or the deceased.

However, all those named as beneficiaries have the right to contest the appointment, as do known creditors. Therefore, a hearing will have to be scheduled and legal notice given.

If there are no objections and your loved one left a will, it needs to be proven valid. This can be done through notarized statements from those who have seen the will, as well as through court testimony from a witness to the will.

It is not uncommon for probate cases to stay open for a few months. This gives creditors a chance to come forward so that the bills can be paid by the executor. Beneficiaries named in the will cannot collect their inheritances until all known debts and taxes are paid.

Once the claim period has passed, and the debts have been paid, the next step in the probate process is to file any necessary tax returns.

At that point, the remaining property can be given to the beneficiaries and the estate can be closed. Experienced probate lawyers can help you through the process, regardless of whether or not there is any contention involved.

Avoiding Probate Requires Planning

Probate is a completely avoidable process, even though thousands of people each year have to contend with it.

Put simply, avoiding probate is as easy as some proper planning. Taking the time that you need to plan ahead will save headaches and all future probate troubles.

With just a few simple steps, our loved ones, friends, and family members will receive the benefits of our estate plan without any probate intervention.

Here are five ways to plan your estate in preparation for probate.

1. Draft a Living Trust

A revocable living trust will enable your family members to transfer your property and possessions in a timely manner without probate interference.

2. Convert Accounts to Pay-on-Death

Choose your benefactor, and fill out a form. Then, all of your money will be transferred to your beneficiary immediately, avoiding probate completely.

3. Establish Joint Tenancy

Joint tenancy, or joint entirety, is a method of removing your name from all titles, replacing it instead with joint ownership. Thus, when you pass, all property automatically transfers to the other person on the title.

4. Gift Property

If your estate is small enough (under $5.45 million), it is sometimes possible to give enough property away to avoid taxation. This process is tricky, so work with an expert on how to formulate the details.

5. Review Small Estate Laws

With a simplified estate-planning procedure for some property types, it is sometimes possible to avoid probate. Look at these particular provisions with an expert to avoid probate on your chosen property.

Beyond Probate

Contesting a will can be a difficult process and should be done with an experienced probate attorney.

To successfully challenge a will, you must show that the will was made under undue influence, is a forgery or fraud. This would mean that the creation of the will involved manipulation and that the will’s creator was somehow vulnerable at the time.

If challenging under “undue influence”, it means the person lacked the free will to bargain due to the manipulative circumstances he was in. You can also challenge a will because another will exists that is newer than the one being submitted for probate. Usually, older wills are destroyed, but not always.

A court wishes to always fulfill the wishes of the testator, so if a newer will is located, generally the courts use the newer will as that would more accurately reflect the testators most recent wishes.

Probate is a complex process. It requires careful consideration and extensive legal consultation. For more information on estate and property management, please follow our legal blog.

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