What is Probate?
Probate is a legal process involving the courts during which the will of someone who has passed away (the “decedent”) is administered. During the administration of the will, the court will review the will to determine that it was properly prepared and executed (this is called admitting the will to probate). After the will has been admitted to probate, the court will appoint someone to be the personal representative of the estate (usually this person is named in the will). The personal representative will be given letters of administration (sometimes called “letters testamentary”). The letters of administration give the personal representative the legal authority to take control of the decedent’s assets. Once the personal representative has control over the decedent’s assets, debts and taxes are paid and the decedent’s property is then transferred to those named in the will (the “beneficiaries”).
What is a properly prepared and executed will?
A properly prepared will is a valid legal document which accurately directs the decedent’s wishes. Among other things, a properly prepared will should designate what happens to all of the decedent’s property when he or she passes away. Additionally it will name a personal representative (sometimes called an executor), possibly name a guardian for the decedent’s children, and state how taxes and expenses of the decedent’s estate are going to be paid.
During execution of a Will, the document is signed. There are many specific requirements that must be met for a Will to be properly executed. An estate planning attorney will make sure that the Will execution is valid.
What if the decedent did not have a will?
Someone who dies without a will is said to have died “intestate.” If an individual dies intestate, the laws of intestacy govern how the probate property of the decedent is divided. Probate property is all property a person holds in his or her own name which cannot be disposed of in some other manner, such as through a trust, joint tenancy, a beneficiary designation or an account with a payable on death (POD) designation.
Does a probate estate always need to be opened to transfer probate property?
If the net value of the probate assets (their value after subtracting liens and encumbrances) does not exceed $100,000, a probate estate may not need to be opened with the court. In these cases, an affidavit may be used to distribute the estate to the persons entitled to it. If there is real estate that needs to be sold, instead of transferred to heirs, then a probate estate will need to be opened with the court.
What legal steps need to be taken after someone dies?
If there is property which needs to be transferred through probate, there are a range of types of estate administration which are available. On the simple end of the range, the property may be able to be transferred through an affidavit with no formal administration. On the other end of the spectrum, a supervised estate administration with probate court involvement may be required. If a decedent had a trust, no probate may be necessary, however, other steps such as retitling property or filing tax returns may be required. Consulting with an attorney can save time and money by helping to ensure the most appropriate manner of handling the settlement of the decedent’s affairs is chosen.
How long will it take to administer my loved one’s estate?
If an estate has to be opened with the court, the probate process will last at least six months. During this time, creditors and other interested parties have an opportunity to file claims against the decedent’s estate. A supervised estate may take longer to administer than an unsupervised estate. Additionally, if there is real estate to sell, waiting for someone to purchase the real estate may prolong the probate process.
What is the difference between supervised and unsupervised administration?
During the unsupervised administration of an estate, the court typically is involved only in the appointment of the personal representative. The personal representative then proceeds with the inventorying of the estate, payments of creditors and taxes, and distribution of property without involvement with the court. At the end of the process, the personal representative must provide all beneficiaries with a written accounting of his or her actions during the course of the administration. If someone believes that the personal representative acted improperly they may file with the court an objection to the personal representative’s accounting.
What are some of the tax considerations related to my estate?
For 2024, the federal estate tax threshold is $13.61 million for individuals, which means married couples don’t have to pay estate tax if their estate is worth $27.22 million or less. For 2023, the threshold is $12.92 million for individuals and $25.84 million for married couples.
Because this threshold has increased in recent years, frequently estate planning now focuses more on the effect of estate planning on income taxes to be owed and paid by the decedent, the decedent’s estate, and the heirs. Also, the desire to eliminate the complications and expense of probate is still a paramount consideration.
In addition, the estate tax threshold can be decreased by Congress at any time, and good estate planning takes into consideration all such future possibilities.