What is Probate and Why is it Needed?
To understand the importance of probate for executors and beneficiaries, it is essential to first clarify what probate actually is. Simply put, probate is a legal process that establishes the validity of a deceased person’s will. The term also sometimes refers to the legal administration of a deceased person’s estate under the court’s authority and supervision.
Probate is required by law to ensure that the assets of a deceased person are distributed in accordance with that person’s wishes. In other words, probate is the process used to confirm that a deceased person’s will – if they had one – and their intentions concerning the distribution of their property are legally valid and can be given effect. Once probate has been granted by the probate court in the jurisdiction where the decedent had residence at the time of death, the executor or personal representative may be granted authority to carry out the terms of the estate as expressed in the decedent’s will. Carrying out the instructions may involve collecting copies of important legal documents and information such as the death certificate , the will, a list of the decedent’s assets, evaluation of the decedent’s estate, and filing for probate. Aside from filing for probate, the probate process may involve administration of the deceased person’s assets and affairs during the period when the estate is being settled. The probate process may also require accounting for (and inventorying and appraising) all the assets and liabilities of the estate.
In terms of determining when probate is required, the circumstances of an estate’s administration typically determine what will happen. For instance, distribution can occur outside of probated if all beneficiaries of a decedent sign a renunciation or release form. Although in some states, the amount of property left that does not pass by virtue of beneficiary designation or joint ownership with rights of survivorship are small enough to fall under the small estate laws, which allow for simplified distribution.
Finding Free Legal Help for Probate
Legal Aid Societies: Legal aid societies provide free legal services to those who can’t afford a lawyer and meet certain income requirements. They often offer assistance with probate matters.
Law School Clinics: Many law schools across the country have clinical programs where students provide services under a professor’s supervision. If you don’t mind a student handling your case, this is a great resource.
The American Bar Association: The ABA often has pro bono information specific to each state. Check the website for specific resources available in your area.
Online Forums: Websites like Avvo allow you to ask legal questions of attorneys and get answers. While not as direct as in-person assistance, it can be helpful in understanding the basics of your case.
Community Centers and Houses of Worship: Local community centers and houses of worship often have legal workshops. As with law school clinics, if you’re alright with a student handling your case, these are good assistance centers.
Public Libraries: Your local library may have regular legal workshops or be able to direct you to legal resources in your community.
Common Issues in Probate and How to Legally Solve Them
Common Probate Issues
The probate process can be a difficult time for the surviving loved ones left behind. One of the most common problems to face a family after the passing of a loved one is the fact that the will is contested by one or more of the beneficiaries.
The reasons this may happen are many. Possibly, there is a resentment from one sibling that is long-standing, or maybe one sibling feels they were wronged during their parent’s lifetime.
Maybe the parent did not have a good relationship with his second or third spouse, and there is an estranged child from that relationship, or perhaps the child felt that the parent favored his or her half-brothers or half-sisters, and now feels that he or she should get something just because he or she is the child of the previous relationship.
Probate litigation is necessary in order to ensure that the true wishes of the decedent are carried out. If there was any type of incapacity present at the time the will was executed, then the will is void ab initio, or "from the beginning." Perhaps it was just a case of undue influence, where the objecting family member asked their parent to omit the objecting child altogether from his or her will.
An executor may be guilty of mismanagement of the estate. Maybe he or she has not properly brought the assets of the estate into the estate, or has failed to properly pay the debts of the estate, causing an accounting to be necessary.
Many times, one sibling (or more) will complain that the property is not being fairly divided. If an item such as a stamp collection cannot be divided, the interested parties will often have to make an offer to purchase. One sibling may want to dump the family car, for example, while another wants to keep it. Then the appraisals will have to be submitted to the court.
The probate process can be lengthy, complex, and a source for much heartache. For free advice about how to proceed, at what point an attorney steps in, or how to press forward, give us a call today.
The Duties of an Executor during Probate
When a person passes away, and a will exists for that person, a personal representative will be appointed to handle the administration of the terms of the will. This personal representative is known as the executor of the estate. The executor’s role is to marshal the assets and distribute them according to the terms of the will, as well as settle any debts of the decedent as follows:
• Creditors must be paid from the funds of the estate, not with the executor’s or beneficiaries’ funds (if the executor has had to advance money to maintain property, for example, from his own funds, he or she should seek reimbursement from the assets of the estate).
• Payment of funeral expenses usually has a priority over other claims.
• Taxes and governmental claims follow, and often there may be advantages in having the IRS or state of Florida wait on payment of their claims until other claims have been settled.
• Once the claims of creditors, estate and inheritance taxes have been paid, the executor will pay expenses of the estate, normally the expenses of administration and then finally the distributions to the beneficiaries.
• Set-offs for any advances or gifts of property made to beneficiaries while the grantor was living should be calculated and accounted for usually at the time of application for discharge of the executor .
Executors have a fiduciary duty to act in the best interest of the beneficiaries of the estate and if any decisions are made regarding an asset of the estate which will affect the beneficiaries differently, a choice must be made as to whose interest is to control during the period of administration. The executor must consider the time value of money and whether he or she should hold property until a sale may be obtained or sell the property at whatever price can be obtained in a timely manner. An example where the executor would hold property is where the attorney for the estate has experience in the long-term appreciation of real estate, such as condo properties in Florida and can advise the executor as to whether a hold strategy or sale strategy is better for the estate and can verify that optimum price has been achieved before the estate sells the asset.
Probate attorneys advise executors of the benefits of seeking professional advice, so that proper accounting, tax consequences and holding of assets can be done and properly handled by someone who focuses entirely on estate administration and probate litigation in the estate.
Ways to Avoid the Cost of Probate- Free Legal Tips
Not surprisingly, people are generally surprised when they see the costs associated with administering an estate. This is a natural result of the costs of probate administration not being covered in most estate plans. You do not want your estate to contain costs that are at least partially avoidable.
There are planning tools for probate avoidance. Living trusts allow for a probate avoidance universe. There are no probate costs associated with living trust administration. While you have to fund a living trust with all of your assets to get the benefits of probate avoidance, the probate savings can be substantial. You will save on the costs of court filings and paper work, publication costs, wealth transfer taxes , professional fees and fiduciary commissions. You also avoid the costs of attorney involvement in the administration of your estate.
Joint ownership is another option for probate avoidance. You can arrange for joint ownership with another party for any of your assets. You can arrange for joint ownership as tenants by the entirety, joint tenants with right of survivorship or tenants in common. While there are downsides to joint ownership, such as the loss of control over the property and the potential loss of creditor protection, the probate savings may be significant.
It is important to keep in mind that if you create a joint ownership situation, you can undo the joint ownership at any time, which may permit you to add new co-owners. This change might benefit your estate from a tax perspective.