|Erin A. Smith, Esq.|
Many of my clients express their desire to avoid probate or to make probate easier for their family members at the time of their demise. By understanding the probate purpose and process, it can help an individual craft their ideal estate plan.
Assets that are in the decedent’s name alone go to probate. Those assets with a survivorship interest, payable on death beneficiaries, transfer on death beneficiaries, or those assets that are in a trust do not go through probate.
Probate is the process through which title is transferred to heirs on all of the assets that are in the decedent’s probate estate. It is also an opportunity for interested persons – for example, creditors of the estate or a disinherited spouse or child – to make claims. A person’s estate is probated whether he dies with or without a will.
The basic outline of the process is as follows:
1. The executor files the will with the Clerk of Court where the decedent was domiciled at death. The Clerk “qualifies” the executor to handle the administration.
2. The executor pays the probate tax and posts a bond to cover the value of the estate. Surety, which is insurance, is required on the bond in some cases. It can be waived in a will. However, it will always be required if there is an executor who lives out of state.
3. The executor is then required to prepare an inventory of all assets in probate within 4 months of their qualification.
4. The executor must account to the court for all receipts, checks, and disbursements from the estate to the penny.
5. Debts, expenses, allowances, taxes, filing fees, bonding fees and fiduciary commissions are all paid first. Then once expenses and debts are paid, the assets can finally be distributed to the beneficiaries. At that point, the executor can file a final accounting.
Probate can be long, usually a minimum of one year, but can also remain open for much longer in some cases. Everything done in probate is considered a public record, so confidential information is available to the public, which is enough to discourage many people from the process.
There are ways to avoid probate, namely, by holding title jointly with rights of survivorship or always establishing a payable on death beneficiary. The most effective way to avoid this process is by creating and funding a trust.