Types of Probate
There many different types of probate across the various states, but 5 of the more common are:
- None — If the estate qualifies, you may be able to settle the estate without official probate (see Small Estate Probate)
- Summary — The easiest and shortest form of probate, but usually only for small, simple estates
- Informal — The most common form of probate, but requires that there are no disputes the court needs to resolve
- Formal — Lengthier and more expensive, but can resolve disputes. Often benefits from the assistance of a lawyer
- Supervised — Rare and onerous; used when the court finds that an heir needs protection (for example)
Is Probate Necessary?
Probate laws and rules are determined at the state level; there are no federal requirements. In most cases, if the estate contains only assets that do not require probate (see Probate Exclusions below) or the remaining estate is considered "small", then full probate is not required (although some still choose to go through probate – see Benefits below).
See Settling Small Estates for state-specific rules about bypassing or minimizing probate.
Is a Lawyer Required?
In most cases, the decision to retain a lawyer is up to the executor.
Two states (IA, MS) do require an attorney for probate ... unless a small estate settlement process will be used. Similarly, unless a small estate settlement process will be used, FL and TX require a lawyer to represent the executor if there are heirs other than the executor, or if there are creditors involved.
Note that even if the executor does hire a lawyer, the executor will still personally have a lot to do, and EstateExec will still be very useful in terms of tracking assets, expenses, and more.
Probate Process
Probate details vary significantly by state, and sometimes even by county, but there are many common elements. While it is sometimes possible to settle an estate without going through probate, many of the basic concepts are the same whether or not the court is involved:
If you are using the EstateExec App, it will provide you step-by-step instructions for your particular estate, but overall probate has the following basic components:
Executor Appointment: The first step in the probate process is to get the court to formally appoint you as executor (or personal representative, or administrator, or whatever local term is used). This step requires filing documents with the court, notifying potentially interested parties, and obtaining a probate bond if required. In AZ, you will also need to obtain a certificate of probate training. See Becoming an Executor for details, and Probate Forms.
Estate Inventory: You will need to provide the court with an official inventory of the estate (all assets and debts). Often, an initial version of this inventory will be required along with the probate application, but this inventory can be updated later if additional information comes to light. See Taking Inventory.
In Each State: Personal property (such as a bank account or coin collection) is generally probated in the decedent's legal state of residence, but real estate is probated where the property is physically located. Certain classes of personal property, such as vehicles that are registered and titled out of state, may also need to be probated in the jurisdiction where the property is domiciled. If there are multiple real properties in a single state, you can probate them all in the same probate court, but if the decedent owned property in multiple states or internationally, you'll have to go through the settlement process in multiple locations (see Ancillary Probate).
Family Entitlements: A surviving spouse and other dependants often have rights to the estate that can supersede the terms of a will or even legitimate claims of creditors. In some cases you are legally obligated to inform the spouse of those rights, and in you may be required to wait a certain amount of time to let the spouse decide whether to make any claims. See Family Entitlements.
Creditor Notification: It is best practice to notify creditors of the probate process so they know to submit claims, and many states require such notification for estates within their jurisdictions. See Finding Debts.
Debt Resolution: Once you understand the overall financial situation of the estate, you must attempt to resolve all debts. See Resolving Debts.
Tax Payments & Discharge of Personal Liability: You are responsible for filing a tax return for the decedent's final year of life, and for the estate. It is best practice to then apply for a Discharge of Personal Liability (IRS Form 5495) before distributing assets to heirs. See Paying Taxes.
Asset Distribution: Once you have resolved all debts and paid any taxes due, you can distribute the remaining assets to the rightful heirs. See Making Distributions.
Final Accounting & Probate Closing: In general, the probate process concludes with submission and court approval of a "Final Accounting" and a "Probate Closing Statement".
Probate Exclusions
Even if an estate undergoes probate, a number of asset types are generally exempt from the probate process:
- Assets with named beneficiaries, such as
- IRAs, 401Ks, and so forth
- Life insurance policies (unless the beneficiary is the estate itself)
- Funds held in Payable-On-Death (POD) account
- Securities registered in a transfer-on-death (TOD) form
- Real estate subject to a transfer-on-death (TOD) deed
- Vehicles registered in a transfer-on-death (TOD) form
- Jointly owned assets, such as
- Property held in joint tenancy with right of survivorship
- Community property with right of survivorship
- US Savings bond with multiple owners
- Sundry low-value household items
- Assets held in a trust
Court Location
It can sometimes be difficult to determine which court to use for a given estate. The particular type of court that oversees the probate process varies by state: it may be a dedicated probate court, a circuit court, a superior court, a general county court, or something else. If you are using EstateExec, Tasks: Start probate (see sample) will help you find the appropriate court for your estate.
As noted above, remember that real property must be probated in the state in which it is physically located, so you may need to go through probate in multiple states.
Costs
It will likely only cost a few hundred dollars for probate court costs ... and thousands of dollars to pay lawyers, appraisers, and possibly a tax accountant. The average estate spends $12,400 on lawyers and accountants (see General Statistics), and since lawyers and accountants typically charge by the hour, having your information well-organized via EstateExec will likely pay for the EstateExec licensing fee many times over.
Benefits
If probate is required, one clear benefit of probate is that you will be following the law. However, even if probate is not required, it can help shield you from potentially unhappy heirs, and it will also get you a document commonly known as your "Letters" (sometimes known as Letters of Authority, Letters of Administration, Letters Testamentary, etc.), which will make it easier for you to prove your authority when dealing with third parties such as banks.
EstateExec Service
EstateExec has arranged for experienced attorneys to file probate cases for EstateExec customers in select locations; availability and cost depend on location of the estate. See Probate Service for details on this optional service; you are also welcome to use your own attorney, or none at all.
Additional Information
See EstateExec Reference: Manage Probate for instructions using EstateExec during the probate process, including identifying assets subject to probate, generating Inventory Reports, and more.
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