You’ve likely heard of probate, and maybe you vaguely know that it’s something people try to avoid. But what is probate, exactly, and is it really so bad? Learn more about what probate means, what it might look like for your estate, and how much it will cost.
What Is Probate?
Probate is the court process of wrapping up a person’s estate—meaning all of the property the person owns at the time of death. During the probate process, the court supervises the transfer of property to the inheritors, as well as the paying of any debts and taxes owed by the deceased person.
If the deceased person left behind a valid will, the property will be distributed according to the terms of the will. If there’s no will, the property will go to the heirs determined by state laws. (See What Happens When You Don’t Have a Will?) Whether there’s a will or not, probate will generally be necessary unless your estate is small enough to qualify for a shortcut, or you’ve taken other measures to avoid probate (discussed more below).
What Purpose Does Probate Serve?
What’s the point of probate anyway? Why all the fuss? Probate procedures help ensure that a deceased person’s property goes to the correct beneficiaries (inheritors). As you might imagine, conflicts over the property someone leaves behind are not uncommon. In addition, if a deceased person dies with many debts, probate procedures allow creditors to make claims on the person's property in an organized fashion. That said, state laws surrounding probate can be extremely complicated, causing perhaps more hassle than is truly necessary. As a result, some states have adopted the Uniform Probate Code, a model law that streamlines and standardizes the probate process. All states are free to adopt the code or not, but the states that have adopted it in entirety tend to offer a simpler probate process.
What Is Probate Court?
Each state has a specialized court that handles probate matters. In New York and a few other states, this court is called “surrogate’s court,” and in a few other states it's called "orphans' court"—but in most states, it’s simply called probate court. If there’s a will, the probate court will make sure the will is valid, and if there’s no will, the court will figure out who inherits the property.
Who Is Responsible for Handling Probate?
So who has to go to probate court? If you made a will, you likely named someone you trust to be the executor or personal representative of your estate—the person who will inventory your property, pay your creditors, and distribute assets to your beneficiaries. If you didn’t name someone, or if you didn’t make a will, the court will appoint someone to this role, often called an “administrator.” Whatever the terminology, this person will be responsible for the day-to-day work of managing the estate and distributing the assets, all while under the general supervision of the probate court.
How Does Probate Work?
How exactly do you probate a will? The executor or personal representative opens a probate case by filling the death certificate and other required documents. Then the executor must make an inventory of the deceased person’s property (the estate’s assets), as well as any debts owed. Next, the executor will use the estate’s assets to pay these debts, as well as taxes. Finally, the executor will distribute the remaining assets to the beneficiaries named in the will.
If there’s no will, the court will choose someone to be the administrator using a priority list determined by state law. (For example, a surviving spouse is usually the first choice.)
What Are the Steps of the Probate Process?
The exact probate process varies by state and circumstances, but a typical probate process usually requires an executor or personal representative to take the following steps:
1. File the Request for Probate
If a will named you the executor of the estate, or if there was no will and you’d like to be appointed to the role, you’ll file an application with the probate court and ask to be formally named. At this time, you’ll probably also file the death certificate and the original will, if there is one. Later, when your request is approved (and it almost always is), the court will give you papers that show your authority to act on behalf of the estate. These papers are usually called “letters of authority,” “letters testamentary,” or “letters of administration.”
2. Send Legal Notices to Beneficiaries, Heirs, and Creditors
Early on in the probate proceedings, you’ll need to let people know that the probate case is happening. This alerts anyone who might have a claim to the property. You’ll need to send formal legal notices to beneficiaries (inheritors named in the will), heirs (people who would have inherited under state law if there were no will), and any creditors you know about. You might also be required to publish a legal notice in a local newspaper to alert potential creditors.
3. Prove the Will Is Valid
Typically, when a will is made, it’s witnessed by two people who watch the will maker sign. Later, for the probate court to determine that the will is valid, the court will usually need the statement of one or more witnesses that they signed at the same time as the deceased person. This statement might already exist (affidavits are commonly made by witnesses at the time of the will signing), but if it doesn’t, one or more witnesses will have to sign a statement to this effect or else show up in court.
4. Inventory the Estate Property
You’ll need to make a list of all of the property the deceased person owned, and if the property includes non-cash property—such as a house—you’ll also need to get the asset appraised so that everyone knows how much it’s currently worth. You’ll also include any money owed by the deceased. Some property might be excluded from probate—for example, property that passes through a living trust or transfer-on-death deed—and you won't need to worry about this non-probate property in your official role as executor. When you’re finished making the inventory, you’ll file it with the probate court.
5. Pay Creditors
You’ll then use the estate assets to pay all debts owed. Before you conclude there are no debts, be aware that this includes utility bills, funeral expenses, and the estate’s own administrative expenses, in addition to any legitimate creditor claims. There might be debts you don’t know about, but the window during which creditors can file formal claims is short—usually something like two to six months after you receive your letters of administration. Don’t forget to file the deceased person’s final tax return and pay any taxes owed by the estate as well.
6. Distribute the Property to Beneficiaries
Once the window for creditors to file claims has closed, you can distribute the property to the beneficiaries named in the will.
7. Close the Estate
When the property has been distributed, you’ll submit an accounting to the probate court (documenting where the assets went) and request to close the estate.
Do All Estates Go Through Probate?
Many states offer simplified probate procedures that allow your estate to skip the probate process altogether. Many also offer a very streamlined version of the probate process if your estate is under a certain size. What qualifies as a “small” estate for the purposes of these shortcuts varies by state. You can look up the probate shortcuts available in your state.
Notably, some estates that are relatively large can actually qualify for these small estate shortcuts. That’s because not all property is counted. Some property does not go through probate in the first place (see below), which means that your remaining “probate estate” (the part of your estate that is subject to probate) might be quite small. With some planning, non-probate property might end up being the bulk of the property you leave behind, allowing your estate to qualify for a simplified procedure. In fact, this is the goal for many people who take measures to avoid probate.
What Types of Property Avoid Probate?
Some types of property do not go through probate at all. When strategizing to avoid probate, people often make sure to own their property in these ways:
- Property held in a living trust
- Some types of jointly owned property
- Bank accounts with a registered payable-on-death (POD) beneficiary
- Stocks and bonds with a registered transfer-on-death (TOD) beneficiary
- Life insurance proceeds when there is a beneficiary
- Retirement accounts when there is a beneficiary
- Vehicles registered in transfer-on-death (TOD) form
- Real estate with a transfer-on-death (TOD) or beneficiary deed
The remainder of your property—the property that is subject to the probate process—is your “probate estate.”
Should I Try to Avoid Probate?
Because probate can cost time, money, and hassle, strategizing now to avoid probate can help your loved ones later. Whether you should take action to avoid probate is a personal decision, but some factors to consider include:
- Whether your state has adopted the Uniform Probate Code, a model law that streamlines the regular probate process
- Whether your state offers simplified procedures for “small” estates
- Whether your estate is likely to qualify as "small"
- The cost (in time and expense) of the probate avoidance tools you’re considering
If, for example, you live in Colorado, which has adopted the Uniform Probate Code, the more streamlined probate process might not be as time-consuming as in some other states. Additionally, maybe you’ve already named beneficiaries on your retirement, bank, and mutual fund accounts, which will bypass probate anyway, and own very little else. In this case, your estate might qualify for a simplified probate procedure—so it might not be worth the expense of hiring a lawyer to create a living trust just to avoid probate. On the other hand, if you own a high-value home, you might want to consider creating a living trust or using a transfer-on-death deed to keep that home out of probate. (See Why You Should Avoid Probate.)
How Long Does Probate Take?
The speed of the probate process depends on how quickly the executor or personal representative works, the state’s laws, and how busy or overloaded the court is. So how long is the average probate process? While the American Bar Association estimates that the average estate takes six to nine months to complete the probate process, in some cases it can take years.
In other words, probate court can mean significant time and waiting periods for your loved ones. With a few exceptions, the executor can’t distribute estate property to the beneficiaries until all accounts are settled and the waiting period for creditors expires.
Is the Probate Process Expensive?
Probate can get complicated, and it’s likely you’ll need help from a good probate lawyer. (You can take specific steps to choose a good probate or estate administration lawyer.) When we surveyed our readers who worked with probate lawyers, about a third paid less than $2500 in total for help with estate administration, while slightly less than a quarter paid more than $10,000. Where your estate will fall in this range will depend on, among other factors, the complexity and total value of the estate you're handling. See How Much Do Lawyers Charge to Help With Probate or Settling an Estate?
Executors are usually entitled to take executor fees for their work. Many don’t because they are inheriting almost everything anyway, or because they are family members who feel uncomfortable taking payment, but it’s certainly not uncommon to take reasonable compensation. The exact amount executors are entitled to take depends on the will and state laws.