Dear Client:

As we near Labor Day and the beginning of another school year, I hope you have had a wonderful summer.

This edition of my blog, on www.benebuslaw.blog, centers around issues of probate and lists advantages and disadvantages of the probate process. This article is not intended to be a comprehensive summation of the probate process, but intends to offer and address only those points that frequently appear in the probate process in the author’s experience.

Probate

Definition
Probate is the legal process of transferring a deceased individual’s property to the successor. Probate also requires giving notice to creditors of the estate and allows creditors up to four months to make a claim against the estate. Further, the probate process is overseen by the state judiciary such that the proper applicant is appointed by the court to carry out the collecting of assets, paying creditors, and distributing the remaining property to the entitled individuals or entities.

Application and Administration
Application to the court for probate must occur in the county where either the property exists, or in which the decedent last resided. An attorney generally files the application on behalf of the estate because of the number of forms required and a general familiarity with the process. Application for probate generally include the name of the individual seeking to be named the personal representative, the name of the decedent, a list of interested parties that may either play a part in monitoring the estate or as a beneficiary, and a list of probate property.

Upon proper completion of the application, the probate registrar, or judge, will approve a notice to be published in a local newspaper. Such notice offers creditors and other individuals an opportunity to file a claim with the estate or to contest the naming of the personal representative.

The probate process allows for either an informal process or a formal process. Informal probate allows the personal representative to administer the estate as deemed necessary. Formal probate offers an opportunity to contest potential rulings and requires approval from the probate court of several actions. Such actions might include the naming of the personal representative and the method for dividing assets among potential beneficiaries.

Positive Aspects of Probate
Probate provides several advantages of distributing property of a decedent. They might include:

1. A traditional legal process is followed to ensure the appointment of a competent personal representative.
2. An opportunity is provided to contesting parties to air their arguments and for a judge to make decisions for the administration of the estate.
3. A will, if valid, may be given a hearing to ensure satisfaction of the wishes of the decedent.
4. Creditors’ rights have an endpoint.
5. Similarly to #5, beneficiaries’ rights and privileges have an endpoint. On the other hand, beneficiaries have a forum to be heard if they have a grievance.
6. A proper conclusion for the administration can be determined to relieve further obligations of the estate and liability of the personal representative.

The key to probate is a regulated process to be followed. The process does not allow an individual to simply act as they wish or to handle a decedent’s property in a rogue fashion outside the probate process.

For example, if a parent has died with varied property and without a will, a strong-willed heir cannot simply take charge of the process without giving notice to other potential heirs and allowing those heirs an opportunity to challenge the initial heir. Even if the decedent had a valid will, there are instances when an heir tries to circumvent the process by simply acting in control of the estate. Strong-willed heirs do not necessarily get to do as they please and must follow the process. If the decedent had property with a bank or other financial institution, the strong-willed heir cannot act to take that property until receiving an appointment as a personal representative. Even then, the strong-willed heir is accountable to the court.

Negative Aspects of Probate
While the process of probate can be important, many estates do not require such intense attention to the process. Many estates may not need probate if heirs are cooperative and willing abide by the decisions made, but without proper planning, some negative aspects of probate may appear including:

1. Probate can be time consuming because the court must be petitioned to act by the submission of an application. Without proper, accurate information, the court will refuse to move forward. Time is often of the essence in transferring ownership of property to heirs and probate can slow down that transfer.
2. The expense of probate, even for a basic estate, can amount to a few thousand dollars payable to the attorney for processing and to the court and other entities for fees.
3. Assets may be subject to spoliation if not cared for while the probate process is ongoing. Houses require attention. If rental property is involved, landlords need to be appointed and rents collected. If investment assets are part of the estate, such stocks and bonds may rise or fall in value without anyone directing their management.
4. If an heir dies or becomes disabled before the probate is completed, the cast of heirs might change causing additional complications in administering the estate and transferring property. An heir with children might leave rights to the children to inherit the heir’s portion of the inheritance. It is not always clear beyond the initial heirs who is to get the property.
5. With the passing of time, occasionally the laws change regarding the substance of transferring property at death.  For example, if estate tax rates change, the estate may owe a greater tax if transference is delayed.

Avoiding Probate and Conclusion
Probate can be avoided, or at least expedited, with adequate planning. Naming beneficiaries or certain properties can bypass probate. Adding joint tenants to co-own property can leave a survivor that would then bypass property. Transferring titles of property to appropriate trusts can further remove the concern of probate.

If it is presumed probate is mostly about the process, then conducting that process of determining who inherits before the decedent passes can simplify the process tremendously. In addition, a well planned estate can reduce monetary costs because parties already understand how property is to be distributed and inherited at the death of the individual. Conflict and argument is greatly decreased to permit a smoother transfer of ownership upon the death of a loved one.

If you have not reviewed your estate plan in the past 3-5 years, it is strongly recommended you meet with your legal and financial advisors to ensure a better process and smoother transition if fulfilling your goals for your estates.

Thank you for the opportunity to have been of service in the past. Feel free to call with any questions you might have in the future. As always, if you have appreciated my service and know a person who might also benefit from my services, referrals are welcome.

Regards,

Scott A. Becker, Esq.