What is Probate? How does it work?
By Kevin Dufficy
What is probate? How does it work?
Simply put, probate is the re-titling (change of ownership) of assets that require a paper transfer. These assets could include real estate, automobiles, bank accounts, invested assets, pension plans and other items.
When a person dies, the legal process begins to effect the direction of a will either left by the deceased or directed by the courts in the absence of a written will.
Probate is a process that identifies the deceased person’s assets and provides for the legal transfer to the intended beneficiaries. The process can identify debts, value property, and pay debts and taxes.
Probate involves the filing of paperwork, public notices and court appearances by lawyers. Attorneys are paid a fee from the estate to provide the legal services, and the amount of these fees is determined by the extent and often times the value of the estate.
The normal process would begin with the person named as the “personal representative” as directed by the will of the deceased. In the event of a person dying without a will, the representative will be appointed by the court. The personal representative normally hires the attorney to help direct them through the legal process. The court and the public are notified of the decedent’s passing and put on notice that the probate case is open. The will is validated and the list of assets is presented to the court along with any debts and unpaid taxes. Known creditors and beneficiaries of the estate are notified.
The representative must manage the assets during this process and make certain that the assets are secure. If instructed by the courts, the representative may be required to sell or make a change in an asset. This instruction may be from details listed in the will and may need to be done to comply with any specific bequests such as a cash gift or disbursement.
In most cases probate can last for a period of 9 months to a number of years depending on the complexity of the estate. Once the court has determined the estate is ready to close, the probate judge provides the documents to legally transfer inherited assets to the correct ownership and the estate is transferred. The court then will close probate and the estate will be finished. The personal representative will file the final tax return for the decedent and the probate process will come to an end.
About Kevin Dufficy
Kevin Dufficy is a seasoned financial expert having written articles and blogs on a wide range of financial, investment and retirement planning topics. He has an MBA from UC Berkeley, and a degree from H.E.C., the leading French business school in Paris, France. To follow Kevin"s profile, click here.