I am frequently asked, “What is probate?” and “How long does probate last and how much does it cost?” Often people have misconceptions about the probate process, one that comes up most often is the belief that having a Will allows your heirs to bypass probate when you die – it does not. This article is meant to shed some light on what probate is, when it is needed, and what happens during the process.
Probate is the legal process through which a court oversees the collection and distribution of the assets that are left when a person passes away.
What is Probate?
Probate is the legal process through which a court oversees the collection and distribution of the assets that are left when a person passes away. Assets include anything a person owns at the time of their death, such as real estate, personal property, and cash, for example.
When is Probate Necessary?
Not always. It depends on what type of assets the deceased person owned and how the assets were owned. If the deceased person owned real property with a surviving spouse or another person with rights of survivorship, that spouse will automatically own the property. If a deceased person owned bank accounts with another person, the surviving joint owner automatically owns the entire bank account. If a person dies leaving very few assets, such as personal belongings or household goods, these items can be distributed to the rightful beneficiaries without the supervision of the court.
A probate is usually needed to clear title to land that is not owned jointly with rights of survivorship, stocks and bonds, or large bank or savings and loan accounts that were held in the name of the deceased person only. The probate process will put title to these assets in the names of the rightful beneficiaries. The probate process is also used to collect debts owed to the deceased person, settle disputes between potential beneficiaries or those who claim they are entitled to assets of the deceased person, and resolve any disputes about the validity of the deceased person’s Will.
In some situations, Oregon allows a condensed version of probate for handling small estates that would otherwise require a full probate. The cost and time for distributing the estate assets may be greatly reduced if an estate fits in this category. Instead of filing a petition, a small estate proceeding is opened by filing an Affidavit of Claiming Successor. This can be done when the estate’s personal property is valued at no more than $75,000.00 and real property is valued at no more than $200,000.00, for a total aggregate estate value of no more than $275,000.00 (these values can be changed at any time by the state legislature).
What Happens During Probate?
Probate begins with presenting the court with the deceased person’s will, if they had one, a death certificate, and a petition to allow the personal representative to administer the deceased person’s estate. A personal representative is a person who handles the deceased person’s affairs. Typically, a will names a person to act as a personal representative. If there is no will, then the probate is of an intestate estate, and the personal representative is determined based on statutory guidelines. The personal representative in an intestate estate is usually a spouse, adult child or other close relative. Any person can be named as the personal representative in a will, however, to be given authority by the court the person must be willing to serve and otherwise qualified. If no one else is available, the court will name a bank, trust company, or lawyer to act as the personal representative.
After probate is opened and a personal representative is appointed, there are initial responsibilities that the personal representative must take care of. This includes a notice to known creditors, notice to heirs and devisees, and notice to interested persons published in a local newspaper. The notice to interested persons tells creditors, and others, that they have four months to bring any claim against the estate for debts the deceased person owes them.
Next, all of the assets that the deceased person owned at the time of his or her death are identified, and an inventory is filed with the court listing each asset and the estimated values. The part of the process can be fairly simple, or complex, depending on the types of assets and the records available to the personal representative.
The personal representative is also responsible for paying the debts of the decedent. It is important to note that creditors must be repaid from the estate before the remaining estate assets can be distributed to the beneficiaries. The personal representative is also responsible for preparing state and/or federal tax returns and any inheritance, estate, and gift tax returns and pay any taxes due.
An accounting is due annually, and a final accounting is due when the estate is ready to be distributed and closed. The accounting is submitted to the people named in the will, the heirs, and the court. Sometimes, the heirs and people named in the will can choose to waive the accounting, which can speed up this part of the process and save some fees.
The accounting explains all of the important actions taken in connection with the administration of the estate and shows all of the money paid out from the estate, and all the money received by the estate. After approval of the final accounting by the court, all unpaid expenses of the estate can be paid, and the remaining assets distributed to the people and entities entitled to them.
The probate process can be started immediately after death and takes a minimum of four months. There are situations, such as the sale of real property or complicated tax matters, that can cause probate to last much longer.
Focused and driven, Traci is passionate about helping her clients build and prepare for their future.