How the Probate Process Works
Probate describes the gathering of the decreased individual’s assets with the intention to distribute them to inheritors and creditors. Probate process dependsupon the relevant state’s adoption of Uniform Probate Code (UPC), a group of probate laws written by a cohort of national experts. UPC’s goal is to simplify the probate process for smaller estates and to provide executors with greater flexibility in the proceedings.
Alaska, Utah, Arizona, South Dakota, Colorado, South Carolina, Florida, North Dakota, Hawaii, New Mexico, Idaho, New Jersey, Maine, Nebraska, Massachusetts, Montana, Michigan, and Minnesota have adopted the UPC.
Probate Process in UPC-Adopted States
Law is similar in UPC-adopted states but it’s not identical. You must familiarize yourself with your state and county rules. Under UPC, there are three basic kinds of probate: 1) informal; 2) unsupervised formal; and 3) supervised formal.
Most probates are informal in UPC states. It’s a relatively simple process used when inheritors are friendly and you don’t anticipate creditor claims. If you expect anyone will contest, you should not use informal probate.
The informal probate process is paperwork. Court hearings aren’t required:
- File an application with probate court to initiate informal probate. Identify yourself as the “personal representative.” UPC states don’t use administrator or executor.
- When the application is approved, the personal representative has official authority, e.g. in documents called “letters” or “letters testamentary,” to act on the estate’s behalf. You must do the following:
- Send written notices of probate to creditors, heirs, and beneficiaries you know about.
- Publish a notice of probate in the newspaper to alert creditors.
- Supply proof that you properly published and mailed notices.
- Prepare an appraisal and inventory of the decedent’s assets.
- Safeguard estate property in the probate process.
- Distribute the property according to UPC and county laws.
After distributing the property, informally close the estate by filing the “final accounting” paperwork with the court. As a last step, file the “closing statement” to state you’ve paid all outstanding taxes and debts, distributed the estate property, and submitted a final accounting to the court.
Unsupervised Formal Probate
The unsupervised formal probate process in UPC states requires a traditional court proceeding. It’s often used when a reason exists to involve the court. For instance, if heirs disagree over the distribution of assets, if heirs must be determined without a valid will, or if minors stand to inherit significant property, the personal representative will want to involve the court:
- You may need court permission to sell the decedent’s real estate, distribute estate property to intended beneficiaries, pay for a lawyer’s services, or pay yourself for work performed on the estate’s behalf.
- File an accounting statement to show how you handled assets of the estate to close.
Supervised Formal Probate
Supervised Formal Probate is used the least often in UPC states. It’s rarely used unless the court needs to supervise procedure. For instance, if one of the beneficiaries can’t look after his or her own matters and requires protection of the court. You’re required to get the court’s approval before distributing estate property.
Probate Process in Non-UPC Adopter States
Each probate court has individual rules concerning require documents, what documents must contain, and how documents must be filed. Since no estate is typical, here’s an outline of states that don’t use the entire UPC. As of this writing, most states use parts of the UPC:
- Begin the process by asking the court to recognize your role as executor. If you’re accepted as executor, you must:
- File a petition or application request for probate in the decedent’s county in which he or she lived at the time of death. File the death certificate along with the original will, if any, with the court.
- Publish the notice of probate in the local paper according to court’s rules. Identify creditors, if any, and mail notices to them.
- Mail the notice to heirs and beneficiaries, as required by law.
- File proofs that you mailed and published the notice in accordance with the law.
- If the court requires one, post a bond to protect the estate from losses you might cause up to a specific dollar amount. The bond amount will depend upon the estate size.
- Provide statements from witnesses to prove the will’s validity. Submit the “self-proving affidavit” signed by witnesses before a notary when the will was signed.
- File additional documents as required by the court.
Administering the Estate. The executor must keep charge of estate property. He or she must safeguard it during the process of probate. Prepare a list of the decedent’s assets and, if needed, have assets appraised. You must:
- Get an employer identification number (EIN) from IRS for the state.
- Notify the state’s health and welfare department, Social Security Administration, etc., if required by law.
- Open a bank account for the estate.
- Prepare tax returns for the estate.
- Prepare an inventory of estate assets and provide appraisals if necessary. File the inventory and appraisals with the court.
- Notify creditors by mail and pay the decedent’s outstanding debts. State law may specify a certain time period for creditors’ payments.
- File approved creditors’ claims (or those you’ve denied) with the court if required.
- File a federal estate tax return within nine months of the decedent’s date of death if required. Most estates don’t owe federal estate tax.
- File a state estate tax return, typically within nine months of the decedent’s date of death. Less than half of non-UPC states impose tax on estates as of this writing.
Closing the Estate. After the creditors’ claim period is past and you’ve paid debts and filed tax returns as necessary (and you’ve settled any disputes that arose as part of the probate process), it’s time to distribute property to beneficiaries:
- Mail a notice to beneficiaries and heirs about the final hearing. Note that you must do this within a specific period of time prior to the hearing.
- Provide proof that you mailed notices as required and file these with the court.
- Obtain the court’s permission to distribute estate property.
- Transfer property or assets to new owners and obtain receipts.
After assets are distributed, ask the court to release you from duties as the estate executor.