Probate and Estate Administration.
Probate and estate administration proceedings can seem daunting and complicated, but they don't have to be. At Gravis Law we are dedicated to making the process uncomplicated. Let our team guide you through the process.
What is probate?
Probate is the legal process by which a court formally recognizes a deceased person’s last will and testament (if there is a will) as a true and correct original. The term "probate" is often inaccurately used as a shorthand reference to the estate administration process as a whole, but as a technical matter once the will is proved to be true and correct the probate process is complete and the estate administration process begins.
What is Estate Administration?
When a person dies, called a decedent, all that is left is their "estate." The estate is comprised of all the property the decedent owned during life and is responsible for all the debts the decedent owed during life. Before the estate can be distributed to the decedent's heirs or beneficiaries, all the debts generally must be satisfied. In order to accomplish this process, someone must be appointed to run the estate just as a company would need a CEO or manager to manage a company's affairs.
The first part of the process is to appoint the person who will manage the estate. This person is called a personal representative if appointed in a will or an administrator in the absence of a will. The terms personal representative and administrator are often used interchangeably and are also often referred to as an executor or executrix, for simplicity we will simply refer to this person as the estate's "PR."
Once appointed, the PR is charged with the authority to manage all the affairs of the estate in order to wind up the decedent’s affairs. The PR must collect all the decedent’s property, collect any outstanding income, inventory and value the property, identify all the decedent's debts, pay or settle those debts, pay the decedent's last taxes, and finally distribute the remaining property to the beneficiaries in accordance with the will or by statute in the absence of a will. This process can be accomplished within months in certain circumstance, but can take years depending on the nature of the decedent’s estate, nature of claims made against the estate, and how the heirs and beneficiaries decide to behave during the process. The typical estate takes from 6-12 months to settle all the affairs and distribute.
Estate Administration process:
- Probate - The process by which a will is proved as a true and correct original will. This only occurs for estates where the decedent left a last will and testament.
- Appointment – The procedure where a court appoints a person as the estate's PR vesting them with all the authority necessary to manage the estate's affairs.
- Letters of Administration or Letters Testamentary – After appointment, the court directs the issuance of "letters" to the PR. This is simply an official court document that proves the PR has the authority to manage all estate affairs. You can think of letters as analogous to a power of attorney, the letters authorize you to access bank accounts, investment accounts, change title to property, and much more.
- Marshal Assets and complete Inventory – After letters are issued, the PR is tasked with locating and rounding up all the decedent's property, called marshaling, and creates a simple inventory to establish the total value of all the decedent’s property.
- Identification and Notice to Creditors – After letters are issued, the PR is also responsible to identify all the people the decedent may have owed money to prior to death. Generally, the PR would then publish and mail a "notice to creditors" to each known creditor which requires them to file a claim for payment with the estate. Providing notice reduces the amount of time a creditor is allowed to bring a claim.
- 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 that does not have enough property to pay all these things is called an insolvent estate and will follow a different procedure to settle the debts and taxes.
- Final Distribution and Closing – After all the estate property has been rounded up, all the debts, taxes, and other claims have been paid or settled, the PR then arranges for final distribution of the remainder to the beneficiaries named in the will or, in the absence of a will, the heirs as defined by state law and the estate may be closed.
Is a court proceeding required?
The laws of probate and estate administration differ from state to state, so it is good to consult with a legal professional to determine if a formal court proceeding is necessary in your situation. The answer generally depends on the amount and types of property the decedent held during life and what estate planning steps the decedent took to avoid a court proceeding on his or her death.
Most states have simplified estate administration procedures for smaller, lower value, estates. 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. Washington state has a simple affidavit procedure to accomplish the same thing and does not require a court hearing.
A decedent, by appropriate estate planning, can also structure his or her estate in such a way that no court procedures are required to settle the estate on death. Transfer on death deeds, revocable living trusts, and transferable on death designations are a few of the tools used to accomplish this.
How much does estate administration cost?
Well, that depends . . . (how's that for a lawyerly answer?).
In a simple situation where the decedent engaged in flawless planning, all family members get along swimmingly, and no further steps are required, it could cost next to nothing. On the complete opposite end of the spectrum would be where there was very poor planning, disputes about the validity or interpretation of a will or other testamentary documents, highly contentious family conflict, numerous claims against the estate, and constant disputes among family members. Often, you won't be able to determine the complexity of an estate until after the process begins.
More often than not, the process runs smoothly and conflict can be minimized. In those instances, the variation in costs is largely dependent upon the location where the estate had to be administered. Some states have much more arduous procedures and court costs than other states and the rates for legal services vary from location to location. The best way to get a more accurate estimate of cost would be to consult with your local Gravis Law probate attorney to answer that question after understanding your situation.