What is Probate?

The word probate comes from a Latin root meaning “to prove.”  In other words, probate is a process whereby the will of someone who has died, the decedent, is proven to be valid.  In addition, the court has jurisdiction to supervise marshalling of the decedent’s assets, paying the decedent’s debts, and finally, distributing the rest of the estate to the beneficiaries.

That is all that probate really is – an orderly, legal process for passing of the assets to the decedent’s beneficiaries.  The authority of the court is present – that’s what “jurisdiction” means – to ensure that the property is passed the way that the decedent intended after his or her debts are paid.  The probate process comes into play, however, only if the decedent left a will and has assets greater than $150,000 titled in his or her name alone.  If the decedent died without a will, then the state’s laws of intestate succession become important.  If the decedent left a trust or made other arrangements for passing property (such as designating a beneficiary on a life insurance policy or placing a joint tenant on a bank account), or if the decedent’s estate is valued at less than $150,000, then there may be no need for probate.

What follows is a very general overview of the probate process.  If you are faced with acting as someone’s executor, you should speak with an attorney about the specific things you should do.  When someone dies with a will, an early step is to find the will, and file it with a petition for probate with the Superior Court.  You must schedule a hearing, where the court agrees to the appointment of the executor named in the will and issues “letters testamentary,” which enable the executor to manage the decedent’s affairs while the estate is open, that is, before the estate is distributed to the beneficiaries.  Such a hearing is often a quick matter.
Once the letters testamentary are in hand, the executor or administrator (the executor is someone named in the will; the administrator is appointed upon petition) sets about determining what assets and debts the decedent left, securing the assets, and paying the debts.  Within four months after his or her appointment, the executor or administrator is required to file an inventory of the estate with the court.  Only after this inventory is filed can the estate be distributed, although it is sometimes possible to arrange for an earlier partial distribution of funds.

Also, four months after the hearing in which the estate is opened, creditors’ claims are cut off.  That is, someone to whom the decedent owed money, as long as he was properly notified of the probate, cannot come later to claim against the beneficiaries.

Finally, about seven to twelve months after the hearing, the probate court orders the estate distributed.  At this time, attorney’s fees and executor’s fees are paid.  The attorney receives $4,000 of the first $100,000 of valuation of the estate and then is paid at a decreasing rate thereafter.  For example, for a $200,000 estate will owe approximately $7,000 to the attorney.  This fee is less than the fee paid to a real estate agent for selling a house.  As the real estate agent ensures that the sale of the house is properly done, the attorney ensures that all the legal work pertaining to transferring the entire estate is properly done.  The executor is entitled to identical fees, but since executors are often beneficiaries of the will, the executor’s fee is often waived.

The probate process, although relatively simple and straightforward, can be complicated by various problems.  There may be problems locating assets, determining ownership of assets, or dealing with will contests and other claims against the estate, but probate is not designed to be a treacherous, difficult process.  Understanding a little bit about it can help people to deal with the process better.

What is an estate plan?

Estate planning is more extensive than simply writing a will.  It is often thought of as a two part process.  One part is the planning the management and transfer of your property during life and after death.  The second part addresses your needs and care if you are no longer able to take care of yourself.

Before you prepare any estate planning documents, you should do some basic thinking.  First, you need to think about your objectives with regard to transferring your assets to your heirs, friends and charities.  Second, you need to understand the full extent of your property.  That is, what exactly is in your estate, and what is your estate worth?  The value of your estate is important in determining your estate plan because larger estates are subject to estate tax and require more complex planning.  Other matters of concern are how title is held to your assets and the disposition of the proceeds of life insurance or retirement benefits.

You also need to think about who will receive your assets at your death – your initial beneficiaries and, if those first beneficiaries die before you do, who would then receive your assets.  Perhaps you would want to consider more distant relatives, special friends, or a charity.  You also need to think about who will administer your estate after your death, that is, who will be your executor.  This should be a person whom you trust and who will be active and able to assist in marshalling your assets (what assets are there and where they are), paying bills and keeping an account, and distributing assets according to your wishes.

After you’ve though about your assets and their transfer, you should then consider plans for taking care of yourself and managing your estate if you’re no longer able to do so.  Who would help you?  Where would you want to live?  How much income will you have?
Everyone needs estate planning, regardless of the size of the estate.  The information in this article is provided for general information only.  If you have any questions about estate planning please contact a competent estate planning attorney.