The Probate Process

What exactly is the probate process?

After someone passes away, we look to see whether there were any assets that a person died owning in their name alone. This is what has to go through probate. Any assets that have a joint owner or beneficiary go to the joint owner/beneficiary outside of probate.

Probate Process with a Will

Probate begins when someone files the initial forms with the probate court. Typically, a certified death certificate, family information, and information about the will and its executor are required. The initial probate forms include all of the decedent’s next of kin, even if those people are not inheriting any assets under the will.

Before the executor is appointed, the court may require that the executor post a bond. Often in a will, the decedent will have decided that a bond is not required. The decision on bond is ultimately up to the court. The bond is an insurance policy that protects the beneficiaries in the event the executor would steal money, pay creditors out of order, etc. Any beneficiary or creditor of the estate can request a bond at any point in the estate administration. The value of the bond is based on the value of the assets in the estate. The bond amount is typically double the value of the personal property in an estate. The personal property is the tangible physical items and the intangible items like accounts. If there is real estate that is going to be sold, the court may require an additional bond amount that includes twice the value of the real property. This is because the executor will be holding on to cash after the house is sold.

After the court has reviewed the initial probate forms, the court will admit the will to probate and appoint the executor. The court issues a Letter of Authority to show appointment of the executor. If the first person who is nominated as executor in the will begins to administer an estate, the probate court will likely appoint that person to be the executor. If the first person nominated would like to decline to be the executor, they can file a declination with the court and the probate court will typically appoint the next person in line.

When the will is admitted to probate, the executor must give notice to all of the beneficiaries in the will and the next of kin. This notice can be waived when these beneficiaries sign a waiver. Anytime someone waives notice of something in probate, it saves time and money, because the estate would otherwise have to give notice to that person by certified mail. And if that mail doesn’t arrive, or if the return receipt doesn’t arrive, there are additional fees to show that the executor made all of those mail attempts. Once everyone has either waived notice or been given notice, the executor must file with the court a form called a “Certificate of Service of Notice of Probate of Will.” This is probably the most legally significant probate form. After this form is filed, the statute of limitations begins to run for someone to contest the will. There are ninety days from the date this notice is filed for someone to contest a will.

As a practical matter, after the executor is appointed, the executor is going to need to open an estate checking account at a bank. To do this, the bank is going to need an employer identification number (EIN) from the IRS. The bank will also require a death certificate and the letter of authority from the probate court. The executor will use this bank account to deposit assets of the estate that are liquidated into cash. As long as the executor (in the will) has the power to sell property, the executor can sell property as soon as they are appointed by the probate court. Generally, the executor may not sell property that is specifically left to a particular person. All the cash goes in to the estate account.

Three months after the executor is appointed, the estate inventory is due. The executor must file a list of all of the assets and the values as of the date of death. The inventory must show verification of values through bank statements, appraisals, etc. All of the beneficiaries must be given notice of the inventory (which they can waive). The executor must file proof with the court that the notice was given or waived. The court has thirty days after the inventory is filed to approve the inventory.

After the inventory is approved, the executor will begin distributing assets. After this is completed, the executor will file a final account showing all of the receipts and disbursements of the estate. Once the account is filed, the account is set for a hearing. Just like the inventory, the beneficiaries get notice of the hearing. And just like the inventory notice, the account notice may be waived. The court will hold the hearing on the account and then discharge the executor and bond (if a bond was required).

Probate Process without a Will

The probate process without a will is fairly similar to the probate process with a will. We don’t use the term executor when there is no will. Instead, the fiduciary is called the administrator. Probate without a will also begins when someone files the initial forms with the probate court. Typically, a certified death certificate are family information are required.

Unless the only beneficiary of the estate is the administrator, a bond is almost always required when there is no will. The value of the bond is based on the value of the assets in the estate. The bond amount is typically double the value of the personal property in an estate. The personal property is the tangible physical items and the intangible items like accounts. If there is real estate that is going to be sold, the court may require an additional bond amount that includes twice the value of the property. This is because the administrator will be holding on to cash after the house is sold.

There is an order of priority as to who would be appointed administrator of an estate. If there is a surviving spouse, that person has priority to administer the estate. If there is no surviving spouse and multiple children, the job is next open to those children. The easiest way to get appointed when there are multiple eligible administrators is when those who are not interested waive their right to administer. If there are multiple eligible people who apply to administer the estate, the court may just appoint someone unrelated to the family to avoid a conflict.

Three months after the administrator is appointed, the estate inventory is due. The administrator must file a list of all of the assets and the values as of the date of death. The inventory must show verification of values through bank statements, appraisals, etc. All of the beneficiaries must be given notice of the inventory (which they can waive). The administrator must file proof with the court that the notice was given or waived. The court has thirty days after the inventory is filed to approve the inventory.

As a practical matter, after the administrator is appointed, that person is going to need to open an estate checking account at a bank. To do this, the bank is going to need an employer identification number (EIN) from the IRS. The bank will also require a death certificate and the letter of authority from the probate court. The administrator will use this bank account to deposit assets of the estate that are liquidated into cash. Unlike an executor, who usually has has the power to sell property in a will,  an administrator cannot sell property as soon as they are appointed by the probate court. An administrator must wait until the inventory is filed to seek permission to sell any personal property and must wait until the inventory is approved to sell real property. Since there is no power to sell property in a will, consent from estate beneficiaries is usually required to sell real or personal property before the court will grant its permission to sell.

After the inventory is approved, the administrator will begin distributing assets. After this is completed, the administrator will file a final account showing all of the receipts and disbursements of the estate. Once the account is filed, the account is set for a hearing. Just like the inventory, the beneficiaries get notice of the hearing. And just like the inventory notice, the account notice may be waived. The court will hold the hearing on the account and then discharge the administrator and bond (if a bond was required).

It’s important to understand the full extent of the probate process to keep the estate administration moving forward.