Probate and estate administration can be tricky and complicated. We are dedicated to making complicated situations uncomplicated.

Probate and estate administration can be tricky and complicated but we are dedicated to making complicated situations uncomplicated.

WHAT IS PROBATE? Probate is the legal process by which the court formally recognizes a deceased person’s Will (if there is a Will). The court also appoints a Personal Representative (PR) of the estate to wind up the decedent’s affairs. The PR must inventory and value the decedent’s property, and then make arrangement to pay the decedent’s debts before distributing the remaining property to the beneficiaries as directed by the Will or state laws if there is no Will. Probate can be accomplished in a matter of months, or may take years, depending on the nature of the decedent’s estate, claims against the estate, and the actions of the beneficiaries.

THE PROBATE PROCESS:

(1) Appointment – The nominated PR or person with priority to be PR files with the court a petition for probate of the Will and the petitioner’s appointment as PR.

(2) Acceptance and Letters – The court reviews the petition, verifies the Will was properly executed and supported by testimony as to its validity, any required formalities with regard to appointment were followed, and then orders that the petitioner is appointed as PR and that Letters Testamentary be issued.

(3) Inventory – The PR takes stock and determines the appropriate value of the decedent’s property.

(4) Notice to Creditors – Generally, it is advisable to publish a notice to creditors. This reduces the time the creditors have to file a claim against the decedent’s estate. Notice must also be mailed to the reasonably ascertainable creditors.

(5) Payment of Debts and Taxes – Properly presented creditor claims, as well as the decedent’s final income taxes and any estate taxes, must be paid. An estate without sufficient funds to pay all of a decedent’s debts must follow state specific rules as to the priority of claims against the estate.

(6) Final Distribution and Closing – The PR arranges for final distribution to the estate’s beneficiaries and obtains receipts for those distributions. After the final administrative matters are complete, the PR files to close the estate. Depending on the circumstance, you may be required to petition the court for approval of the final distributions as proposed.

IS PROBATE NECESSARY? The laws of probate are different from state to state, so it is a good idea to get local advice as to whether probate is necessary in your situation. Our law firm works in Washington and Idaho, both of which have mechanisms to simplify probate or provide alternative procedures for certain situation. For example, in Idaho, a spouse that is the sole heir of a decedent may petition the court for summary administration. Summary administration allows title to the decedent’s property to pass to the surviving spouse after a single hearing. However, even such a process can be waylaid by intervening parties.

Probate is most costly when the beneficiaries disagree about the administration and distribution of the estate. A surviving spouse attempting summary administration may discover that the decedent spouse had separate property that was unknown to the survivor. An heir entitled to a portion of that separate property may cause the need for probate rather than summary administration. Similarly, an heir or beneficiary may dispute the validity of a Will submitted to probate, or may take issue with the way in which the PR is managing an estate, the expenses incurred, the PR’s compensation, or may claim that they are due a larger share because of a promise made by the decedent, or just because the person feels entitled to more. Disputes such as these cause the need for more legal work, and increased legal fees, to settle the claims.

ARE THE ASSETS SUBJECT TO PROBATE? Not all assets are subject to probate. Assets like retirement accounts or life insurance policies may pass the associated property to a designated beneficiary outside of probate. This process is controlled by the company managing the asset. Generally, you will need to fill out a form provided by the company that designates who receives the account or proceeds upon your death. Similarly, property held with a right of survivorship will pass without probate to the surviving co-owner or co-owners listed on the account or title. Trust property is not subject to probate. Trusts are often used to avoid probate because a trustee administers them with no need for probate. For example, a married couple creates a living trust to hold their property, and they appoint themselves as trustees. The trust provides that upon the death of the couple, their child is nominated as successor. The trust agreement then directs the successor trustee how the property is to be managed. No probate is required for the trust to operate.

A trust, like a probate estate, is subject to beneficiary claims, such as improper expenses, inappropriate trustee compensation, or claims of improper distributions or other mismanagement by the trustee. Also, assets must be actually transferred into the trust to be controlled by the trust agreement. Probate is still necessary to transfer property that was not re-titled before the owner’s death.

Like we said, things like probate and estate administration can be tricky and complicated. If you need legal advice about administering a loved one's estate, give us a call at 253.858.5434 to set up an appointment today.