Probate Process: Who Needs It and Why? | Adviser Investments

An Overview of the Probate Process. Who Needs It and Why?

The probate process exists to protect your estate plan wishes and loved ones. It’s likely, however, you’ve heard recommendations to avoid probate court at all costs. Yet there are numerous reasons why your family may need a probate judge after your passing.

What Is the Probate Process?

The probate process is a legal procedure that validates a will, gives authority to an individual to administer a deceased’s estate, and ensures assets and debts are managed in accordance with state laws.

The estate executor or personal representative—the individual responsible for overseeing the deceased’s estate, including collecting assets, paying debts and taxes, and distributing surplus assets to beneficiaries—will be a part of the probate process described below.

Who Needs Probate Court and Why?

The probate court process confirms the authenticity of a deceased’s will—aka “last will and testament”—and their emotional stability during the will’s creation. Other names for this court include surrogate court and family court.

Here are six reasons why probate court comes into play:

  1. Absent Beneficiaries: If beneficiaries have died or none are named, the probate court will determine who receives the deceased’s assets. Generally, recipients are immediate family.
  2. Incapacitated Decedent: The decedent was not mentally stable when creating their will and, therefore, the asset distribution may be unjustified.
  3. Minor Children: In the event of your death, who will care for your children? The probate court will ultimately make the decision; however, wishes stated in your will are heavily weighed. Therefore, it’s imperative to name a guardian and alternative guardian for children age 18 and younger. It is also important to specify individuals you don’t want to raise your children, and ensure both parents name the same guardians in their respective wills, in the case of divorce or remarriage.
  4. No Will: If you die without a will, your estate will likely need to pass through probate by default, creating expenses for your family and delaying the financial security you intended for them. However, if your estate is small (typically defined by dollar value), assets may be distributed without going to court—a process known as Small Estate Administration. Note, estate value limitations vary by state.
  5. Sole Ownership: In the absence of a will or trust naming beneficiaries, when the deceased owns an asset (e.g., business, car, diamond ring, etc.) exclusively, the probate court reviews the holding before transferring it to a beneficiary. Depending on the value, the item may require assessment by a professional appraiser.
  6. Unsuitable Executor: The named estate executor is incompetent or unavailable and, therefore, the probate court may assign an alternate executor. Ideally, the individual is named within your will.

How Long Does the Probate Process Take?

The probate court process varies by state and can take a few months or years. The timeline depends on efficient application submission, court-imposed wait times for creditors to submit claims and beneficiary challenges. Also, estates with assets in multiple states and unusual assets can delay the probate process.

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what is probate court

Estate Planning Tip: When creating a trust or will, consider all assets you own, including businesses, financial accounts, personal belongings and real estate. It’s imperative to proactively title all assets effectively and assign personal belongings to specific heirs.

Keep in Mind

When filing a probate petition, you must submit a certified death certificate and the most recent, original, wet-ink will. Also, before completing the deceased’s tax returns, obtain an estate tax ID number. Remember, the decedent and their estate are separate taxable entities.

Next Steps

The probate process is often challenging. However, there are steps to help simplify the process and ensure your wishes are fulfilled in the event of your death. Hiring an estate attorney is often the first step. Given the importance of this professional’s role to help you make informed decisions, we recommend our podcast, “5 Key Questions: Finding the Right Estate Attorney for YOU.”

Finally, it’s important to revisit your named primary beneficiaries each year and after a major life event, like a new grandchild, an adult child’s divorce or other significant changes in your situation. Regular reviews, especially with an experienced professional, will help to minimize unneeded probate intervention.

Contact Adviser Investments anytime for assistance. We’re here for you.

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Tax and legal information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice.  Personalized tax advice and tax return preparation is available through a separate, written engagement agreement with Adviser Investments Tax Solutions. We do not provide legal advice. Always consult a licensed attorney or tax professional regarding your specific legal or tax situation.

Our statements and opinions are subject to change without notice.  All investments carry risk of loss and there is no guarantee that investment objectives will be achieved.

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