Probate is a legal term that refers to a particular process that takes place when a person dies. The laws of each state vary. For example, Arizona probate will be slightly different from other states’ laws. Because the laws vary, it’s always a good idea to consult an attorney so you can determine whether a probate proceeding is necessary, whether the fiduciary must be bonded, and what reports must be prepared.
In this post, you’ll find out what probate is, when it’s required, what happens when someone’s made a will and when they haven’t.
What is Probate?
The probate process determines whether the will is valid and authentic. However, that’s not all it refers to. It also refers to the general administration of a deceased person’s will or the estate of a deceased person who dies without a will.
When a person dies, the court appoints an executor who was named in the will or an administrator. Their role will be to administer the process of probate. The administration side of the process includes collecting the deceased’s assets, paying any liabilities remaining on the person’s estate, and distributing assets to the beneficiaries.
A probate proceeding isn’t always essential. It usually depends on the value of a person’s estate. A probate proceeding will be necessary if the estate is of high value.
How Probate Works
When someone dies, their assets are reviewed by a probate court. The final ruling on the division and distribution of assets to beneficiaries is ruled on by the probate court. A probate proceeding starts with the analysis of the deceased person’s will.
Many people choose to write a will. The document will contain instructions on how they want their assets to be distributed after death. However, not everyone writes a will. Sometimes, a person dies without a will, which is called intestate.
Probate With a Will
The person who writes the will is known as the testator. When a testator dies, the person responsible for initiating the probate process is the will’s executor. The executor will often be a financial advisor, or it could be a friend or family member.
The executor has to fulfill several different tasks. The first is to file the will with the probate court. The timeframe during which this must happen varies from state to state.
As soon as the will has been filed, the probate process can begin. First, the authenticity of the will has to be determined by the probate court, and the court officially appoints the executor named in the will. The executor then has the legal power to act on behalf of the deceased.
It’s typical for a will to designate a legal representative or executor approved by the court. They are responsible for locating and overseeing all the assets of the deceased. Part of this process involves estimating the estate’s value by using the date of death value or the alternate valuation date, as specified by the Internal Revenue Code.
Most of a person’s estate comes under the supervision of the probate court local to where the decedent lived when they died. The only exception is real estate. Real estate probate may need to be extended to any country where the real estate is located.
The executor is responsible for paying off any taxes and debt owed by the deceased from the estate. Creditors have on average one year from the date of death to make any claims for money owed to them. If the executor rejects a claim, the creditor can take them to court and let a probate judge have the final say.
Personal income tax returns on behalf of the deceased also have to be filed by the executor. Pending estate taxes can also come due within one year from the date of death.
When all debts have been paid off, the executor seeks the court’s authorization to distribute whatever is left of the estate to the beneficiaries.
Probate Without a Will
A person has died intestate if they didn’t write a will. It is a term that also applies to an estate where the will presented was deemed to be invalid by the probate court.
When a person dies intestate, their assets are distributed according to state laws. If the deceased has no assets, probate may not be necessary.
When there is no will, a probate court proceeding usually starts with the appointment of an administrator. They will be responsible for overseeing the deceased’s estate and functioning as an executor.
The administrator has to locate any legal heirs of the deceased, including surviving spouses, children, and parents. Then, the probate court assesses what assets need to be distributed among the legal heirs and how. In most states, the division will be among the surviving spouse and the deceased’s children.
Is Probate Always Required?
Different states have different laws concerning probate and whether probate is required after the death of a testator . Some have a specified estate value that requires probate. For example, Texas probate laws state that probate can be skipped if the estate value is less than $75,000.