Probate

Overview

During probate, a probate court will determine if an instrument offered as a will is valid. If the probate court deems the will to be valid, it will then supervise the distribution of property according to the terms of the will. Often, the deceased will have already named an executor in the will to oversee the administration of the assets during the probate process.

If a person dies intestate, or without a will, the decedent's estate will still undergo the probate process. The probate court may appoint an administrator to divide the decedent's property. The probate court will then approve the administrator's distribution of the decedent's assets. Both executors and administrators are also more generally known as personal representatives.

Property which passes through the probate process is subject to an estate tax and may also incur an inheritance tax. Estate taxes are the responsibility of the personal representative of the estate. Conversely, inheritance taxes only apply to the beneficiaries under applicable intestacy laws or a valid will.

Non-Probate Property

Some property automatically passes to a beneficiary without involving the probate proceeding, such as property owned by the decedent and another as joint tenants with the right of survivorship, trust property, or property held by decedent and a spouse as a tenancy by the entirety. Property acquired during a marriage in community property states also passes to the decedent's spouse free from probate. Furthermore, property that passes to another person pursuant to a contract does not go through probate. For instance, a person named as the beneficiary of an insurance policy or a payable on death account will receive the decedent's property outside the probate process.

Procedure

State law regulates the probate process. In 1969, the American Bar Association and the National Conference of Commissioners on Uniform State Laws created the Uniform Probate Code in the hopes of establishing a standard probate code throughout the United States. However, while many states have incorporated parts of the Uniform Probate Code, only 18 states have accepted the complete Uniform Probate Code as law.

In order to initiate the probate process, a petition for probate must be filed. Then, all persons interested in the estate must be mailed notice before the hearing. Next, the personal representative takes stock of the decedent's estate and gives notice to any known creditors. The personal representative must pay all taxes and outstanding debts connected to the decedent's estate. Finally, the personal representative dispenses the estate according to the terms of a valid will or the intestacy laws of the state.

If a dispute arises regarding the distribution of property, the disputing party may appeal to the personal representative or the court. If the disputing party is not satisfied by the result of the appeal, the party has the option of filing a lawsuit. A personal representative may lose his/her authority over the estate if the personal representative is found to have breached his/her fiduciary duty. If a party to the probate process feels that such a breach has occurred, the party may petition for the dismissal of the personal representative. Subsequently, if a court determines that the personal representative has been negligent in his/her duties, the personal representative may be held liable for any losses suffered by the estate.