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Welcome to our Faq page, Below we give answers to some of the most common questions.
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WHAT IS PROBATE?Probate is the process that transfers the legal title of property from the estate of the person who has died (the "decedent") to his or her proper beneficiaries. The term "probate" refers to a "proving" of the existence of a valid Will or determining and "proving" who one's legal heirs are if there is no Will. Since the deceased can't take it with him, probate is the process used to determine who gets his or her property. | ||
WHY IS PROBATE NECESSARY?The primary function of probate is transferring the title of the decedent's property to his heirs and/or beneficiaries. If there is no property to transfer, there is usually no need for probate. Another function of probate is to provide for the collection of any estate taxes due by reason of the deceased's death or on the transfer of his or her property. The probate process also provides a mechanism for payment of outstanding debts and taxes of the estate, for setting a deadline for creditors to file claims (thus foreclosing any old or unpaid creditors from haunting heirs or beneficiaries), and for the distribution of the remainder of the estate's property to ones' rightful heirs. | ||
DOES ALL A PERSON'S PROPERTY HAVE TO GO THROUGH PROBATE?No. Some process is a must to transfer the legal title from the deceased's own name to his or her beneficiaries or heirs. Most states also allow a limited amount of several types of property to pass to certain beneficiaries free of probate, or through a simplified probate procedure. Real and personal property owned as a joint tenant passes to the surviving co-owners without going through probate. Other types of benefits, such as life insurance policy proceeds or annuity payable directly to a named beneficiary bypass probate. Money from IRAs, Keoghs and 401(k) accounts transfer automatically, outside probate, to the persons named as beneficiaries. Bank accounts that are set up as payable-on-death accounts (POD for short) or an "in trust for" account (a "Totten Trust") with a named beneficiary also pass to that beneficiary without probate. If a Living Trust holds legal title to some of your property, that also passes to the beneficiaries without probate. (The Trust is a legal entity that survives you after your death. We suggest you hire a law firm or any probate attorney that provide legal advice. An experienced attorney will also help you with estate planning documents. | ||
WHERE IS PROBATE HANDLED?Probate usually occurs in the appropriate court in the State and County where the deceased permanently resided at the time of his or her death. Such courts go by different names in various states. In many states, the court is simply called the Probate Court. However, in some states, they go by different names. In New York, for example, the probate court is known as the Surrogate's Court while in California it is the Superior Court, Probate Division. The probate court usually handles all the personal property the deceased owned, plus all of the real estates that the deceased owned that is located in that same state. | ||
DO WE HAVE TO GO THROUGH PROBATE IF THERE IS A WILL? WHY CAN'T WE JUST DISTRIBUTE THE ASSETS AS THE WILL SAYS?Generally, it is necessary to go through probate or, in the case of smaller estates, a less formal procedure that is still under the general supervision of the probate court, before the deceased's property can be legally distributed. Even if a person dies with a Will (which is known as dying "testate"), a court generally has to have an opportunity to allow others to object to the Will, and if there are any objections, to determine if the Will is valid because it is always possible that there was a later Will (which, if valid, would replace the older Will), or the Will was made at a time the deceased was not mentally competent to make a Will, or the Will was the result of fraud, mistake or "undue influence" or the Will was not properly "executed", or the so-called Will is actually a forgery, or for some other reason (such as a pre-existing contract) the Will is not fully valid, or there are other claims against the deceased's estate that impact what the beneficiaries under the Will would receive. For example, if the deceased owned real estate in his own name, no knowledgeable outside person would accept title to the property, and no bank would lend a new buyer mortgage money on it unless the estate went through probate so "clear title" could be given the new buyer. Similarly, few outsiders would enter into any other transactions involving the deceased's property before the Will is "admitted to probate" and/or someone is lawfully appointed to act for the estate. | ||
WHO IS RESPONSIBLE FOR HANDLING THE PROBATE PROCESS?The Personal Representative (sometimes also referred to as the "executor" or "executrix" if there is a Will, or the "administrator" or "administratrix" if there is no Will) is appointed as part of the probate proceeding and has the responsibility for managing the estate through the proceeding, subject to established probate rules and procedures. In many states, the probate court has a considerable amount of control over the activities of the Personal Representative and requires that she or he obtain the prior permission of the court before certain actions, such as the sale of real estate or business interests owned by the estate, may take place. | ||
I WAS NAMED AS THE EXECUTOR OF MY BROTHER'S WILL. DO I HAVE TO SERVE?No, it is your choice to serve or decline to serve. If you choose to serve as Personal Representative you can later resign, although you may have to provide an "accounting" for the period you served. If you decline to serve or resign after serving, the alternate Executor named in the Will typically is then appointed by the probate court. If no alternate is named in the Will, or the named alternates die or are unwilling to serve, or a person dies without a Will, the probate court will appoint someone to serve. Unless state laws require that another family member or beneficiary wishing to serve to be appointed, and such family members or beneficiaries are qualified, willing to serve, and readily available, it is not unheard of for a probate court to select a "political crony" or a trusted company that has made contributions to the judge or her political party to serve as the Personal Representative as the fees sometimes can be quite lucrative. | ||
IF I SERVE AS AN EXECUTOR, DO I GET PAID?Yes. In addition to all out-of-pocket expenses in managing and settling the estate assets, Personal Representatives generally earn a fee of receive about 2% of the probate estate for their work. (This varies moderately from state to state, and generally decreases as a percentage as the size of the estate increases.) All fees and reimbursed expenses are subject to court approval. Additional fees may be allowed by the court in cases of unusual difficulty or extraordinary circumstances. On the other hand, if a Personal Representative is derelict in duty, the court may reduce or deny compensation, and the Personal Representative may be held responsible for any damages s/he caused. If a person is both the sole beneficiary of the estate, and the estate is not subject to Federal Estate Tax, it usually does not make sense to take any fees as all fee income is subject to income tax. (The money a beneficiary receives from the estate is income tax-free. | ||
WHAT GOES ON IN THE PROBATE OF AN UNCONTESTED WILL?Typically the person named as the deceased's Personal Representative (a more formal term is "Executor" or "Executrix") goes to a probate attorney experienced in probate law matters, who then prepares a "Petition" for the court and takes it, along with the Will, and files it with the probate court. A hearing on the probate petition is typically scheduled several weeks to months after the matter is filed. Depending on the state, and sometimes who the named beneficiaries are, how long before the death the Will was signed, whether the Will was prepared by an attorney, who supervised the "execution" of the Will, and/or whether the Will was executed with certain affidavits, it may be necessary to bring in the persons who witnessed the deceased's signature on the Will. | ||
CAN I DO PROBATE MYSELF OR DO I NEED A LAWYER?While there is no requirement to use probate lawyers, probate is a rather formalistic procedure. One minor omission, one failure to send Great Aunt Tillie a copy of the petition, or a missed deadline, can cause everything to come to a grinding halt or expose everyone to liability. The death of a family member or friend sometimes tends to bring out the very worst in some people. Experience shows that even in close families there is a tendency to get overly emotional about relatively trivial matters at the time of a loved one's death, such as who gets the iron frying pan and who gets the kettle. Such minor matters or any delays or inconveniences can be upsetting, pose issues of fairness, and create unfounded suspicion among family members. Thus it generally is a very good idea to "let a lawyer do it". | ||
WHAT IF SOMEONE OBJECTS TO THE WILL?If someone files an objection to the Will or produces another Will, what is known as a "Will contest" has begun. While Will contests are not that rare, and while few people actually win one, they can be extraordinarily costly and create incredible delays. It is not just anyone that can contest a Will. For example, if you feel your recently deceased next-door neighbor's out-of-state children are awful people who didn't give her proper respect and they do not deserve to get anything, that does not cut it. To properly contest a Will a person must have "standing" to object. If, a person has proper standing to contest a Will -- such as a child who was cut out of the Will by an angry parent, or even by a kindly parent who felt that the local charity, not his children, should get his assets, that child would have the standing to bring a "Will contest". If a Will gives the one sibling 2/3rds of a parent's estate property and the other 1/3rd, the one receiving less has the standing to bring a Will contest. Similarly, if a later Will is less favorable to someone than an earlier Will, or no Will at all, that person has standing. A Will contest sometimes is launched to have a different person or bank or trust company serve as Personal Representative for the estate, or as a trustee of Trusts created by the Will. | ||
WHAT IS THE BASIS FOR A WILL CONTEST?Most of the challenges to invalidating Wills are by potential heirs or beneficiaries who got little or nothing. Questions on the validity of a Will must be filed in probate court within a certain number of days after receiving notice of the death or petition to admit the Will to probate. The typical objections and unhappiness are not one of them are: (1) the Will was not properly drawn, signed, or witnessed, according to the state's formal requirements; (2) the decedent lacked mental capacity at the time the Will was executed; (3) there was a fraud, force, or undue influence; (4) the Will was a forgery. If the Will is held invalid, the probate court may invalidate all provisions or only the challenged portion. If the entire Will is held invalid, generally the proceeds are distributed under the laws of intestacy of the probating state. | ||
WHAT IF THERE IS NO WILL?If a person dies without a Will (known as dying "intestate"), the probate court appoints a Personal Representative frequently called an "Administrator" or "Administratrix" to receive all claims against the estate, pay creditors, and then distribute all remaining property in accordance with the laws of the state. The major difference between dying testate and dying intestate is that without a valid Will an intestate estate is distributed to beneficiaries in accordance with the distribution plan established by state law; an estate law is distributed in accordance with the instructions provided by the decedent in his/her Will. | ||
WHAT HAPPENS IF A WILL CAN NOT BE FOUND?Missing Wills raise all sorts of interesting legal issues which often turn on the specific facts and circumstances, and the law of the state in which the deceased resided. The Will may be missing because the deceased intentionally revoked it, in which case, depending on state law, an earlier Will or the state's rules on intestate succession would determine who gets the deceased's estate. Alternatively, the Will may be missing because it can be proven the Will was stored in a bank vault that was destroyed in an explosion and fire. In that case, the probate court may accept a photocopy of the Will (or the lawyer's draft or computer file), together with evidence that the deceased duly signed the original. | ||
HOW CAN I FIND OUT IF THERE WAS A WILL?The first place to check is with the probate court in the County of the State where the deceased lived. In almost every case the Will, if filed, will be available to the public. Anyone can get to see it, and for a modest fee, obtain a copy. If you are far away, a local lawyer or legal service bureau often can arrange to do a search and get a copy for you, at a relatively modest fee. The fact that a person died -- even if he or she "owned" substantial assets -- does not mean that he or she actually had a Will, or that the Will was duly filed with the Court. In fact, if the deceased held property exclusively through a Living Trust or a joint ownership arrangement, there may not have been a need to file a Will, because the Trust did not "die" with the individual, and with certain forms of joint ownership, the property usually passes to the other joint owners automatically, by operation of law. | ||
HOW MUCH DOES PROBATE COST?The cost of probate may be set by state law or by practice and custom in your community. When all the costs are added up – and the costs may include appraisal costs, executor's fees, court costs, costs for a type of insurance policy known as a "surety bond", plus legal and accounting fees, probate can easily cost from 3% to 7% of the total estate value, and more. If there is a "Will contest" all bets are off. | ||
HOW LONG DOES PROBATE TAKE?The duration varies with the size and complexity of the estate, the difficulty in locating the beneficiaries who would take under the Will if there is one and under state law. If there is a Will contest or anyone objects to any actions of the Personal Representative, things can really drag out. Some matters have taken decades to resolve. | ||
HOW CAN I AVOID PROBATE OF MY ESTATE?One approach to reduce or eliminate the need for probate is through the use of a Living Trust that holds legal title to some or all of your property at the time of your death. The Trust is a legal entity that survives you after your death | ||
HOW ARE ESTATE CREDITORS HANDLED? As part of the probate process, creditors are notified of the death (specific requirements for notification vary from state-to-state, and may vary from a personal letter to a notice published in an obscure weekly newspaper). Creditors must file a claim for the amounts due within a fixed period of time to either the personal representative or, in some states, with the court. If the claim is approved by the executor, the bill is paid out of the estate. If the claim is rejected, creditors must sue for payment. If there are insufficient funds to pay debts, states have statutes of one kind or another establishing who gets paid first. Executors most likely will commence selling property to pay off approved creditor claims. Any claims remaining are pro-rated. | ||
HOW ARE TAXES HANDLED IN PROBATE?For federal and state tax purposes, death triggers two events: (1) It ends the decedent's last tax year for purposes of filing an income tax return, and, (2) It establishes a new, separate entity for tax purposes, the "estate." For Federal tax purposes, it may be necessary to complete and file one or more of the following legal forms, depending on the decedent's income, the size of the estate, and the income of the estate: (1) Final Form 1040 Federal Income Tax return. (2) Form 1041 Federal Fiduciary Income Tax returns for the estate. (3) Form 709 Federal Gift Tax return(s). (4) Form 706 Federal Estate Tax return. |