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Most people don't understand wills or probate, but educating yourself on a few key facts can help you and your family prepare for the inevitable. The laws about what happens to someone's property when they die vary greatly from state to state and can be very complicated. It's in your best interest to consult with an estate planning attorney to review all of the options available under the probate laws in your state.
The probate process helps you transfer your estate in an orderly and supervised manner. A person's estate includes property they own, debts they owe, rights and obligations. If the person who died (the decedent) did not have any property to transfer, probate is usually not necessary. The decedent's survivors, however, may decide to open a probate if there are debts owed or if there is a need to set a deadline for creditors to file claims.
If you have a valid will, then the probate court follows it to determine how your estate is transferred and to whom. The main goals of the probate process are to appoint someone to be in charge of your estate (specified in the will as your personal representation or executor), clarify issues in the will, resolve any challenges to the distribution of funds, and clarify title to property and legally transfer that title. If no beneficiaries were named in the Last Will or if the beneficiaries died before the decedent did, the probate court determines to whom the property should legally go.
Probate also is necessary if the validity of a will is challenged. Common objections include that the decedent was not of sound mind when the will was made, that the will was a forgery, that the will was not properly signed or witnessed, or that there was fraud or undue influence in the drafting of the will.
Estates have to be dealt with in a specific order. For example, any debts or taxes that you owe must be paid before your beneficiaries receive their inheritances. Creditors that have a valid claim are likely to be paid in the following order: estate administration costs, family allowances, funeral expenses, taxes and debts. Whatever's left is distributed to the beneficiaries you named in your will.
If you don't have a will or it is determined that only part of your estate is covered by a valid will, probate applies your state's laws to establish who gets what parts of your estate and transfers title to those people. Generally, your children are first in line to inherit; although in some states, a surviving spouse and minor children share the deceased parent's assets. The state gets your assets only if no relatives can be found.
Despite the occasional horror story, the average time to complete probate is approximately six to eight months. Probate cases can drag on for years, though, if the estate is very large, the estate continues to earn large amounts of income after the person has died or if the will is challenged. Because estate planning generally involves important legal issues, it is recommended that you consult with your legal and tax advisors to ensure any action taken is appropriate for your circumstances.