When a loved one dies, those left behind have to handle the necessary formalities to settle the estate of the deceased, which usually includes probate. Probate is the process of administering and distributing the assets of the decedent. If your loved one made an estate plan during their lifetime, probate could be a relatively quick process. However, if there is no will or the beneficiaries are disputing their share of the inheritance, probate can get convoluted, problematic, and lengthy.
If your loved one recently passed away and you are wondering, “How does probate work?” or you are facing disputes over an inheritance, Morgan & Morgan can help. Our experienced probate attorneys can be by your side and help you handle any inheritance issues. Contact us now for free legal advice.
What Is Probate?
Probate is the process of distributing a deceased individual’s assets to the legal heirs and is a necessary part of settling an estate. Probate can only be avoided in certain circumstances, depending on state laws. Generally, a probate court oversees the proceedings and appoints an executor or representative of the estate. This individual will be responsible for locating and administering assets, paying off any debts, and distributing assets to the heirs.
It is important to note that probate laws vary from one state to another. In some states, a full probate process is not necessary if the estate’s value is below a certain threshold.
Dealing with complicated legal issues when a loved one passes away can feel overwhelming. However, Morgan & Morgan can be here for you if you need advice and assistance from a probate attorney.
The Probate Process
While probate laws and processes can vary slightly, depending on where you live, the general steps in the probate process are:
Filing a Petition
The first step in probate is filing the will with the probate court and filing a petition for appointing an executor who will act on behalf of the decedent’s estate. Once the petition has been filed, all beneficiaries will receive notice. Heirs and beneficiaries could now challenge the will or object to the petition. In the event of no legal will being available, a petition for the administration of the estate should be filed and all legal heirs informed.
Identifying the Decedent’s Assets and Debts
The appointed executor now has the task of identifying and taking control of the estate's assets, which can include:
- Real estate
- Bank accounts
- Life insurance
- Valuables and other personal property
It is important to note that trusts, for example, a living trust, are not subject to probate.
The executor will also identify the debts of the decedent and inform all known creditors of the death and probate proceedings. Creditors generally have a timeframe available in which they can file claims for any money owed to them.
Paying the Estate’s Debts
The executor is responsible for paying all valid debts of the estate, which can include:
- Medical bills of the decedent
- Utility bills
- Credit cards
- Funeral and burial expenses
Additionally, the executor must file a final tax return for the estate and pay any taxes due. There is not enough money available to settle all debts after an individual passes away in some cases. The executor or representative of the estate then sells assets to pay outstanding bills and debts.
After payment of all bills and debts, the executor will begin to distribute the estate’s remaining assets. If there is a will, the assets will be distributed according to the deceased’s wishes. If there is no valid will, state law decides how the assets will be distributed.
Once probate has concluded, the court receives the final accounts of an estate, detailing the payment of debts and distribution of assets. Probate can be unpopular as the entire process, depending on the complexity of the estate, can take up to a year or even longer.
Is Probate Avoidable?
Probate can be a lengthy and costly process. Therefore, heirs often look for ways to avoid probate. Depending on state law and the decedent’s circumstances, it may be possible to avoid probate. For example, estates with a low value can be settled without probate in some states.
Trusts can also be used to avoid probate. However, living trusts have to be set up during an individual’s lifetime, which is why timely estate planning can be crucial. It is also important to note that any property you give away during your lifetime will not be part of the probate process.
Common Probate Problems and Complications
Ideally, the decedent’s will should detail how the estate will be distributed. However, conflicts over the inheritance, whether between heirs or creditors, can be commonplace. Knowing how probate works and hiring a probate attorney can be crucial for protecting your rights in the event of any legal disputes. The probate process can get complicated if:
- There is no valid will, or there are several wills
- Creditors are making unsubstantiated claims
- Disinherited individuals are disputing the will
- Businesses have to be sold or managed as part of the estate
- Beneficiaries and heirs cannot be contacted or located
- There are disputes over the value of the estate
How a Probate Attorney Can Help
A probate attorney can help with many aspects of the probate process. Seeking legal advice when involved in a probate proceeding can be essential, whether you are an heir or a creditor. A probate attorney can help with all essential probate tasks such as:
- Filing petitions in probate court
- Locate, inventory, and value estate assets
- Handle estate tax and income tax returns
- Ensure heirs and beneficiaries receive notice
- Oversee the distribution of assets to the beneficiaries
Disputes and Estate Litigation
Working with an attorney during the probate process is recommended. However, having a seasoned lawyer by your side when disputes arise can be crucial. Legal disputes that can include:
Undue influence describes coercing or influencing a person into making or changing a will. For example, a beneficiary could influence a vulnerable senior to change the will to benefit them. A will could be declared invalid if you can prove that the testator (the person making the will) was unduly influenced.
Elder financial abuse is, unfortunately, common. According to the National Council on Aging (NCOA), victims’ annual financial losses could be at least $36.5 billion. Someone with the power of attorney or guardianship over a vulnerable senior could be financially exploiting the individual to the disadvantage of the estate beneficiaries.
Improper Will Execution
Wills can be contested if they were incorrectly signed or witnessed. A will could also be legally invalid if it contains mistakes or was generally improperly drafted.
Breach of Fiduciary Duty
The executor or personal representative of an estate must act responsibly and in the beneficiaries best interests. If an executor acts fraudulently, charges excessive administration expenses, or breaches their fiduciary duty in another way, they could be ordered to pay damages.
Abuse of Power of Attorney
Having power of attorney allows an individual to act on another’s behalf in legal matters and other affairs. However, a person could abuse their power of attorney to enrich themselves to the disadvantage of the estate and heirs.
Estate Planning Malpractice
Estate planning malpractice can arise if an attorney makes crucial mistakes and oversights during estate planning for a client. Attorney errors could result in an invalid will or improperly administered trust fund.
There can be many other instances of inheritance disputes. In some cases, heirs feel unfairly left out of the will or believe the wishes of the decedent were not respected. However, to have a case, a claimant generally has to prove wrongdoing, such as breach of fiduciary duty, undue influence, or elder abuse. If you think you have a case, seeking legal advice as soon as possible can help you clarify your options. Probate litigation could potentially result in an amended will or a compensation award.