PROBATE: What Everyone Should Know, Part 2

In Part 1 of this Article, we addressed what happens to a person’s property after death and how a Personal Representative is appointed. We also examined the duties of the Personal Representative. In Part 2 we discuss the difference between Probate and Non-probate property, and address the Probate process from initial filing to the final accounting and distribution of assets.

What is Probate?

Although the term “Probate” originally meant the proving of a decedent’s Will, it has now come to mean the entire legal process by which the probatable property of a decedent is administered and distributed. Probate property is any property that passes under the decedent’s Will or by Intestacy. Non-probate property is property passing under an instrument other than a Will. People are generally surprised to learn that property is also transferred outside of probate through non-probate transfers. Examples of non-probate transfers include the survivorship rights in a joint tenancy or the beneficiary designation in a life insurance policy.

What are the Steps in Probate?

Probate is a formal process governed by State statute and court rules. For this reason, the vast majority of Personal Representatives hire a lawyer experienced in the administration of estates to assist them. The attorney’s fee is usually the same as the Personal Representative’s. These fees are also deductible for estate tax or estate income tax purposes making the net cost, particularly in large estates, less than it appears.

An inventory of all of the estate’s assets, both probate and non-probate, must be filed with the Court no later than six months after the Personal Representative has been appointed.

An estate must be kept open for a minimum of seven months to allow sufficient time for creditors to file their claims. No distribution to heirs should be made before that period has run.

Final distributions to beneficiaries should not be made until all beneficiaries have agreed that they have received their full share by signing receipts and releases or a court has given approval for distribution after a formal accounting. Only then is the Personal Representative relieved of personal liability toward the estate.

Is Probate always Necessary? What are the Advantages of a Will? 

Even with careful planning, it is difficult to shelter all of a person’s assets as non-probate property, so probate is often required. It is often advantageous to have a will and go through probate so that assets may be combined and divided equally or proportionately, as the decedent directed, after payment of debts. A Will assures that the Personal Representative is someone chosen by the decedent. It also allows the decedent to choose the Guardian for any minor children and frequently appoints a Trustee to manage a child’s inheritance until they reach an age designated by the decedent (typically when they are out of college).

An experienced estate attorney will be able to advise you with respect to the advisability of a will or trust, or whether a decedent’s estate requires formal probate.

THE RANDALL LAW FIRM is comprised of attorneys Denise M. Randall and Robert G. Randall, Jr. They provide a full range of estate planning services including preparation of wills and trusts, and estate administration (probate). Denise is also an adjunct professor at The College of Saint Rose where she teaches Estate Planning to MBA candidates. Denise is admitted to practice in New York State, and Bob is admitted in New York and Florida. He is also a member of the National Academy of Elder Law Attorneys.